Emissions Trading Scheme (Hansard, 22 April 2002)

§ Lord Whitty

The UK Emissions Trading Scheme went live on 2 April with the opening of the innovative, web-based Emissions Trading Registry, which records the transfer of allowances from buyer to seller. A number of trades have already taken place.

A total of 34 organisations successfully joined the scheme through a competitive auction held in March. In return for taking on legally binding emissions reduction targets, these organisations will each receive a share of the financial incentive that the Government are making available over the five years of the scheme. They can choose to meet their annual targets by reducing emissions themselves or by buying surplus allowances from other participating organisations. To date, over 50 other organisations have opened trading accounts so that they can buy and sell allowances.

We expect the volume of trades and number of participants to increase in the autumn and beyond when participation in the scheme widens as some of the 6,000 companies in climate change agreements begin buying allowances to enable them to meet their targets or selling any over-achievement to other participants. Projects that produce quantified reductions in greenhouse gas emissions will also be able, in time and subject to prior approval from the Government, to earn credits that can then be traded through the scheme.