3rd December 2025
- UKA price increase by 3.6% during November
- 2026 UK ETS auction calendar published
- UK ETS authority publish 2026 civil penalty price
- Carbon removals to be introduced to UK ETS
UKA price increase by 3.6% during November
The December UKA price settled on the 28th of November at £58.28, an increase of 0.9% on the week, 3.6% on the month and a 62% rise so far this year. However, last week’s auction of 2,238m UKA’s cleared £1.06 below the prevailing spot price at the time, causing the secondary market to fall in a short space of time before recovering later in the day. The low auction price was attributed to modest market demand suggesting prices may be peaking in the short term. The EUA price settled on Friday at €81.68, a current increase of 12% this year. The EU will auction 11.5m EUA over four auctions this week.
2026 UK ETS Auction calendar published
The UK ETS auction calendar for 2026 has been published by ICE Futures Europe, the auction provider for the scheme on behalf of the UK Department for Energy Security & Net Zero (DESNZ). From 14th January 2026, just under 52 million allowances will be auctioned across 25 fortnightly auctions, 4.1m (7.3%) fewer allowances than 2025. Verified emissions totalled 85.6m tonnes of CO2 during 2024 was also 10% lower than 2023. UK emissions have fallen mainly due to cuts in the power sector followed by iron, steel and other industrial markets driven by increased offshoring. Based upon the current UKA price of £56, the 2026 auctions will raise £3bn next year for the government.
UK ETS Authority publish 2026 civil penalty price
On the 28th November the UK ETS Authority published the civil penalty price for 2026 in accordance with the Greenhouse Gas Emissions Trading Scheme Order 2020. The 2026 carbon price is calculated by using the average end of day settlement price in 2025 for the 12-month period ending 11th November 2025 as traded on the secondary market UKA December futures. The civil penalty carbon price per tonne of CO2 emitted for the 2026 scheme year will be £49.41.
Carbon removals to be introduced to UK ETS
The UK government has published a final response proposing to integrate greenhouse gas removals (GGRs) into the UK ETS from 2029, with legislation to be finalised by 2028. During the initial phase, the UK ETS cap will be maintained by allowing GGR credits to replace emissions allowances on a one-for-one basis, ensuring that the overall cap level is not affected. Only domestic projects will be eligible initially, with credits issued after verified sequestration and subject to a minimum 200-year permanence requirement. The Authority is considering differentiating between GGR and emissions allowances and is planning to introduce auctions to support market access for new technologies. The government will continue to assess the possible inclusion of high-quality nature-based removals, such as woodland, and will provide further updates as evidence and methodologies develop. This will also form part of the negotiations as the UK and EU have committed to establish a link between respective schemes.
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Disclaimer:
This newsletter is intended solely for the information of professional clients, including large corporates and public sector bodies such as universities and hospitals, and eligible counterparties. It does not constitute advice nor should it be relied upon in making decisions regarding the UK Emissions Trading Scheme (UK ETS). All content within this communication is provided for informational purposes only and has been prepared in accordance with the principle of fair, clear and not misleading information as required by COBS 4.2. Readers should seek their own professional advice when planning to undertake transactions in the UK ETS. No representation or warranty is given as to the accuracy or completeness of the information provided. The publisher accepts no liability for any loss arising from the use of or reliance on the information contained in this newsletter.
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