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EMISSIONS: UK ETS losses £2.9 billion Without EU ETS Linkage

EMISSIONS
CEEMEAEnergy BulletsBulletPower BulletsUKCommodities

UK ETS revenues are expected to lose a sum of £2.9bn from 2025 to 2026 without UKAs prices aligning with EUAs, Institute for Energy Economics and Financial Analysis (IEEFA) said.

  • UK ETS Revenue is forecasted to be at a sum of £6bn from 2025 to 2026, down £2.9bn compared with the revenue of £8.9 using EU ETS prices.
  • Revenues are forecasted to drop to £3.6bn in 2025 and £2.4bn in 2026, down 41% and 61% respectively compared with the £6.1bn in 2024, due to lower prices and auctioned volume.
  • In addition, with the EU CBAM starts from 2026, a persistent UK ETS discount relative to the EU ETS could lead to UK exporters to the EU paying up to £800mn into the EU budget by 2030, Frontier Economics said.  
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UK ETS revenues are expected to lose a sum of £2.9bn from 2025 to 2026 without UKAs prices aligning with EUAs, Institute for Energy Economics and Financial Analysis (IEEFA) said.

  • UK ETS Revenue is forecasted to be at a sum of £6bn from 2025 to 2026, down £2.9bn compared with the revenue of £8.9 using EU ETS prices.
  • Revenues are forecasted to drop to £3.6bn in 2025 and £2.4bn in 2026, down 41% and 61% respectively compared with the £6.1bn in 2024, due to lower prices and auctioned volume.
  • In addition, with the EU CBAM starts from 2026, a persistent UK ETS discount relative to the EU ETS could lead to UK exporters to the EU paying up to £800mn into the EU budget by 2030, Frontier Economics said.