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Britain considers linking with EU Carbon Market

Britain considers linking with EU Carbon Market

The government announced on Thursday that Britain is actively examining the case for linking the Emissions Trading System with the European Union’s carbon market in advance of the UK-EU Summit scheduled for May.

When the leaders of the two sides meet for the Summit, Britain will seek enhanced cooperation in the areas of security, law enforcement, and removing trade barriers.

The UK ETS Authority released a statement that said, "The UK Government is committed to improving UK trade and investment relations with the EU and tackling unnecessary trade barriers."

The statement read: "Ahead the UK-EU Summit scheduled for the 19th of May, the UK Government actively considers the case for linking ETSs."

As part of the EU exit, Britain will abandon the ETS by the end of 2020 and launch its own carbon market.

The EU and UK ETSs both charge power plants and industrial entities for every ton of CO2 they emit, as part of broader efforts to reduce emissions and achieve climate targets.

The UK scheme currently trades at a price of around £58.30 ($58.30), per metric ton, which is lower than the EU where the benchmark contract costs around £79.18 ($79.18).

Analysts say that linking the two systems will likely result in UK prices rising to match those of the EU. ($1 = 0.7718 pound) ($1= 0.9219 euro) (Reporting by Susanna Twidale, Editing by Kirby Donovan).

(source: Reuters)