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5th July 2023

Industry emissions cap reformed as UK targets net zero

A tighter cap on emissions has been confirmed for selected high energy industries as the UK reaffirms its commitment to achieving net zero.

Net zero is a commitment to ensure a balance between greenhouse gas emissions into the atmosphere and those removed from it. Businesses can work towards net zero by reducing the emissions that a company makes directly, indirectly or through its supply chain. Wales is aiming to achieve net zero by 2050, while the nation’s public sector has been set a target to reach the commitment by 2030.

The emissions reforms have been announced by the UK Emissions Trading System Authority (UK ETS), a joint body comprising of the UK Government, Welsh Government, Scottish Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland.

A limit on the total emissions aviation, power and other energy intensive industries can emit has been in place since 2021 and the recently announced reforms will further tighten the cap for these industries from 2024. The scheme will also be extended to apply to more sectors including domestic maritime transport from 2026 and waste from 2028.

The emissions cap aims to incentivise industry to move away from fossil fuels and invest instead in cleaner or renewable energy, helping to meet national net zero and decarbonisation targets.

While the emissions cap will be implemented from 2024, there will be a gradual transition to support the businesses and industries affected.

Oliver Carpenter, Policy Manager at Chambers Wales South East, South West and Mid, said: “With a strong industrial and aviation base in Wales, the reformed emissions cap will certainly impact Welsh businesses.

“It’s important that we take every step we can as a nation towards achieving net zero and decarbonisation, while at the same time ensuring that it is sustainable and feasible for businesses in the long-term. We welcome that a gradual transition to the new cap limit has been announced for the affected industries to support this change.”

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