Published on: 04 August 2020
The UK Government has published a draft consultation on the potential creation of a Carbon Emissions Tax to be implemented once the UK and the EU are no longer locked in the Transition Period.
The consultation sets out how the Carbon Emissions Tax would operate if it were introduced from 1 January 2021. The consultation also provides further information on how the tax could be developed or changed in the future to include other sectors not currently subject to this tax on emissions - such as shipping and aviation.
Currently, the UK is subject to the European Union Emissions Trading System (EU ETS) until 31 December 2020. Under this scheme, operators are required to obtain permits from the relevant regulator to carry out regulated activities which result in the production of greenhouse gas emissions.
The UK Government has said, as set out in its Approach to Negotiations published earlier this year, that it would consider a link between any future UK ETS and the EU ETS.
However, if a link cannot be agreed, the UK will either implement its own UK ETS or the Carbon Emission Tax from 1 January 2021. If the tax is implemented, operators which are part of the EU ETS would become liable to the Carbon Emissions Tax if they emitted above the allowance they have been given.
British Marine members can find out more by reading the draft consultation document. The closing date for responses is 29 September 2020.