What is UK Emissions Trading System – UK ETS?

The UK Emission Trading Scheme (ETS) is a cap-and-trade system run by the government to reduce greenhouse gas emissions. It replaces the European Union Emissions Trading System (EU ETS) from 1 January 2021 onward and regulates emissions from UK power stations, industrial plants, and aviation. UK ETS was created to fill the void EU ETS left following the UK’s withdrawal from the European Union. In terms of design and how the system works, UK ETS mostly resembles EU ETS.