The Confederation of Paper Industries (CPI) calls for a link between the UK and EU Emission Trading Schemes

15 April 2021

CPI (representing the UK papermaking industry) and CEPI (representing the papermaking industry across Europe) have joined calls from other industry and business associations, for the UK Government and the EU Commission to work together on climate change policies and link their flagship emission reduction schemes.

Until the end of 2020, the power generation sector and heavy industry were both regulated by the same scheme; only since the start of 2021 has the UK set up its own scheme as a result of Brexit.  In reality, the UK scheme is underpinned by the same principles as the EU scheme and is based on the same assessments of the same issues.  The main difference is the greater ambition of the UK scheme, with an overall number of allowance set at a level 5% lower than it would have been if the UK had remained in the EU scheme – this would not change if the schemes were linked.    

For regulated UK industry, the establishment of a new stand-alone scheme has added huge fiscal uncertainty caused by the small pool of allowances to be traded and uncertainty over the actions of traders looking to hedge their requirements for future years.  A link to the well-established and liquid EU scheme would allow allowances for either scheme to be used for compliance, so helping smooth the potential for price volatility. 

Andrew Large, CPI Direct General,  said:

“The new UK Scheme has been designed to allow linkage to the EU scheme and we need politicians from both sides to step-up and show their commitment to address climate change is undiminished by Brexit.  We need to move towards a genuinely global price for carbon - a fracture between the UK and EU is counterproductive.”

Between 2008 and 2020, the UK papermaking sector reduced direct emissions of fossil carbon dioxide by a massive 51%, with emissions falling from 3.2m tonnes to 1.6m tonnes.  Allowing for production changes, the amount of fossil carbon dioxide released per tonne of production fell from 0.64t to 0.43t over the same period. 

ENDS

For further information please contact:

Andrew Large, CPI Director General, Tel 01793 889601 or email alarge@paper.org.uk 

Editors Notes

  • The Confederation of Paper Industries (CPI) is the leading trade association representing the UK’s Paper-based Industries, comprising paper and board manufacturers and converters, corrugated packaging producers, makers of soft tissue papers, and collectors of paper for recycling.
  • CPI represents an industry with an aggregate annual turnover of £12 billion, 62,000 employees and which supports a further 100,000 jobs in the wider economy.  
  • UK-EU ETS Linkage Joint Letter (UK)
  • EU-EU ETS Linkage Joint Letter (EU)

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