Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps his Department is taking to ensure that Emissions Trading System free allowances do not adversely impact decarbonisation projects.

The Government is committed to protecting industry from carbon leakage as the UK economy decarbonises. A proportion of allowances under the UK ETS, worth several billion pounds a year at current prices, are consequently allocated for free to businesses at risk of carbon leakage.

The Government is currently conducting a review into free allocation policy. These proposals were included in the “Developing the UK Emissions Trading Scheme (UK ETS)” consultation, published on 25 March 2022, which will run until 17 June 2022.