BUSINESSES are urging the EU and Britain to link their carbon markets to fight climate change.
On Thursday, businesses, energy firms and traders from the European Union and Britain urged both sides to link their carbon markets in a bid to help fight climate change.
Britain left the EU emissions trading system (ETS) at the end of 2020 as part of Brexit and has now set up a UK carbon market, the first auction of permits are due next month.
London and Brussels agreed to consider linking the schemes in a post-Brexit trade deal but, as of yet, this has not begun.
Letters to the European Commission and the British Government from 42 groups, many of which represent industries that are within the carbon market said: “We urge the EU to start the process of linking the EU Emissions Trading System with the new UK Emissions Trading System as soon as practicable.”
This included power industry group Eurelectric, the European Federation of Energy Traders, the Confederation of British Industry and other groups that represent chemicals, metals and ceramic producers.
James Watson, Eurogas secretary-general, said a link between the two would create a more fluid market and help to alleviate administrative issues for businesses in both the UK and the EU.
The EU has plans to improve its ETS by expanding it to shipping, and possibly transport and buildings. The design of the UK and EU schemes are currently rather similar, but the link could be made more difficult by reforms in the future.
A spokeswoman for the UK government said it is considering a variety of options for how the UK ETS can collaborate with other carbon markets.
According to analysts, without a link between the two, permit prices in the UK ETC could increase rapidly when trading starts, because there will be little supply but large demand for the UK permits.