Integrating GGR in the UK Emission Trading Scheme

This submission addresses the Authority’s proposal to integrate GGR into the UK ETS. We respond as individual researchers at the University of Oxford and the Carbon Balance Initiative.

Read the full submission here

Our Recommendations:

• We stress the importance of durable net zero, i.e., the inclusion of the like-for-like principle in balancing CO2 sources and sinks and propose a new principle to ensure the UK ETS aligns with the science behind net zero. We urge the Authority to initially focus on the most permanent GGR techniques, such as CCS-enabled methods, supported by a robust baseline for minimum storage periods.
  

• We recommend that the Authority carefully balance the need to prevent mitigation deterrence with the risk of insufficient storage capacity development. This consideration is reflected throughout our responses on Principles for Policy Design, Cap Policy Options, and Pathway to Integration.
  

• We highlight the risk of under-developing GGR capacity for UK decarbonisation due to a lack of market confidence, low and volatile prices, robust legal frameworks, and the long lead times of project development. We advocate for policy coordination across carbon management legislation, strategic management of storage supply and demand, and exploration of complementary policies like takeback obligations to rapidly scale such capacity.
  

• We strongly recommend that GGR allowances be differentiated from UKAs, focusing on technology- and storage-destination differentiation to ensure effective monitoring and alignment with durable net zero.
  

• We advise a cautious approach to integrating GGRs into the UK ETS, favouring post-2030 implementation aligned with UK ETS Phase II to ensure market stability, confidence and sufficient time for regulatory preparation.