EU ETS Issue 120 - EU Agrees an Amendment to Protect the EU ETS from a Hard Brexit

Following the triggering of Article 50, the UK is due to exit the EU on 30th March 2019, and without any separate negotiated agreement or transitional / implementation deal, it will also exit from the EU Emissions Trading Scheme (EU ETS) on that date.  EU policymakers are concerned that, under a hard Brexit scenario, UK emitters will leave the scheme and could offload their unneeded EU allowances (EUAs) en masse, thereby triggering a destabilisation and crash of the carbon market.  To shield the EU ETS from this risk, EU policymakers have recently agreed an amendment that will void all EUAs issued by a country leaving the EU.

The latest BCC EU ETS Issue 120 aims to summarise recent developments and to outline the numerous potential risks stemming from this controversial measure.

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