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

To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the potential effect of any divergence between the UK and the EU Emissions Trading System on the UK steel sector.

As stated in the Government Response to the Consultation on The Future of UK Carbon Pricing, the design of the UK Emissions Trading Scheme builds on and is similar to Phase IV of the EU ETS, including for free allocation of emissions allowances. This provides continuation of emissions trading and protects the competitiveness of UK businesses. To have a take a fair, proportionate and considered approach to potential improvements to free allocation, we have committed to reviewing free allocation of allowances.

We currently have a range of ambitious policies in place that will help industry to reduce costs and decarbonise, including the Industrial Energy Transformation Fund, Clean Steel Fund and Industrial Clusters Mission, among others. In Spring 2021, we will publish an Industrial Decarbonisation Strategy, setting out a coherent plan for decarbonisation of the UK’s industrial sector in line with our net zero target.