The Government yesterday expanded its carbon trading scheme to cover an additional 160 facilities in the UK.
Between them, these installations are responsible for emitting 9.5M tonnes of carbon dioxide. The details of carbon allowances for individual installations are detailed the National Allocation Plan (NAP), published yesterday by the Department for Environment, Food and Rural Affairs. It follows the Government's announcement in June that the second phase of the European Union's Emissions Trading Scheme (EU ETS) would deliver additional savings of 8M tonnes of carbon each year. Yesterday's allowances must now be approved by the European Commission. The NAP also provides measures for the removal of installations, such as hospitals, universities and the smallest industrial emitters within the scheme, that are responsible for relatively small amounts of emissions, but who face a disproportionate burden in terms of compliance with the scheme. Currently, around 10% of the installations in the first phase of the EU ETS are responsible for only 0.1%, or around 1.25 MtCO2, of the scheme's emissions. Environment and Climate Change Minister Ian Pearson said: 'Our plans for the second phase of the emissions trading scheme expands its coverage and will result in more carbon emissions being monitored. 'We are focusing on the biggest carbon emitters whilst removing those businesses where the costs of the scheme outweigh the environmental benefits. 'Emissions trading is about providing business with a cost effective way of reducing emissions.' Emissions trading sets a cap on carbon emissions from European industries. Under the scheme, installations that emit less carbon than their allocation are able to sell allowances on the newly established carbon market to installations which need to buy allowances to cover extra emissions. Putting a price on carbon creates an incentive for industry to invest in low carbon technology.