UK government to call for carbon emissions tax in event of no deal Brexit

The UK Department for Business, Energy and Industrial Strategy (BEIS) has released new guidance updating how the UK’s climate change regulations, emissions trading and energy labelling would be affected if the UK leaves the European Union (EU) with no deal – a scenario that Prime Minister Boris Johnson refuses to rule out.

The document, 
Meeting climate change requirements if there’s no Brexit deal, details plans to introduce a Carbon Emissions Tax to replace the EU Emissions Trading System (EU ETS), to help meet the UK’s legally binding carbon reduction commitments under the Climate Change Act.

The Carbon Emissions Tax would set a price of £16/t of carbon dioxide (CO
2) emitted by power stations and industrial sites if the UK leaves without a deal. This figure is much lower than the current price of €30/t set under the EU ETS. 

Furthermore, in a no deal scenario, greenhouse gas (GHG) emissions from flights within the UK and between the UK and the EU will no longer be covered by EU ETS obligations. BEIS stresses that the UK will remain a party to international climate change negotiations. The guidelines indicate that there will be ‘no change to the UK’s deep commitment to domestic and international efforts to tackle climate change’ and that the UK will ‘keep step with equivalent ecodesign and energy labelling standards wherever possible and appropriate.’

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