ICE to Begin U.K.’s New Carbon Market on May 19 (2)

By Mathew Carr

Feb. 26, 2021 — LONDON: ICE Futures Europe said it would start auctioning new U.K. emissions allowances on May 19.

On the same day, it will begin offering futures contracts and two days later a prompt contract, UKA Daily Futures, subject to regulatory approval, ICE said in an e-mailed statement. The first of fortnightly auctions would include 6.05 million tons of allowances.

Britain was forced out of the EU carbon market, the world’s biggest by traded volume, following its vote in the middle of 2016 to leave the union.

Some U.K. generators have been using EU allowances as a proxy for British contracts since the end of the Brexit transition period in December. The process of switching to U.K. allowances from European ones could roil both markets, traders and analysts said earlier. See this:

“Today’s publication will give businesses and operators clarity over this year’s supply of emissions allowances, enabling them to plan ahead, build back greener and better prepare for the transition to a
low-carbon economy,” said U.K. Energy Minister Anne-Marie Trevelyan, in the statement.

The U.K. ETS will be pivotal in supporting the climate ambition of the four governments of the U.K., said Gordon Bennett, Managing
Director of Utility Markets at ICE.

“U.K. emissions have fallen 41% since 1990, more than any other major developed country and this has been driven by the U.K.’s leadership in promoting market-based mechanisms to support climate goals. There is an enormous opportunity for cap and trade programs to take an even greater role in supporting the goals of the Paris Agreement, whether it is increasing their sector coverage or encouraging international linking,” Bennett said.

LINK to full release and auction calendar here:

(Updates with comments, contract details)

Photo by Lina Kivaka on

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