18th July 2005 - Trucost Briefing - EU Emisssions Trading Scheme: UK National Allocation Plan Update

This Trucost Briefing analyses the UK National Allocation Plan for the EU Emissions Trading Scheme. It compares the changes between the draft and final allocation plans, provides an update on trading prices and volumes and the effect on electricity prices. It also looks at possible changes for the second phase of the scheme including the introduction of the aviation industry.

Briefing Highlights

- UK Government originally underestimated the total number of EUAs (EU Allowances) needed in the UK
- The deficit of EUAs will be borne by the power generation sector
- EUA prices and trading volumes have increased sharply in recent weeks
- UK Electricity prices have risen by 24% for medium industrial users. 12% of this rise is attributable to the EU ETS and the other 12% is due to higher fuel prices and increased demand
- The imminent closure of the UK's nuclear capacity has precipitated discussion as to whether new nuclear facilities will be built
- Details of Phase 2 (2008-12) of the EU ETS (EU Emissions Trading Scheme) are still in development

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