This was driven by increased CO2 emissions from the UK power sector, which were 9.3 million tonnes higher in 2006 than in 2005. The government put this down to higher gas prices, which led to the increased use of coal-fired power generation. This emits approximately twice as much CO2 per unit of electricity generated as gas-fired power generation.
Nevertheless, the results showed that other industry sectors decreased their emissions by 0.5 million tonnes of CO2 in 2006. The results also showed that, in 2006, UK installations were 100% compliant with the scheme’s requirements to report emissions and surrender an equal number of allowances.
Under the EU Emissions Trading Scheme (ETS), installations that emit more CO2 than their allocation need to buy allowances to cover the extra emissions, and installations that emit less are able to sell allowances.
The government reported that the total UK cap for 2006 was 217.3 million tonnes of CO2, which meant that 33.8 million tonnes of CO2 were purchased through emissions trading to keep within the overall cap.
The government’s provisional estimate of CO2 emissions in 2006 is that they were approximately 5.3% below 1990 levels. However, when the effect of the EU ETS is taken into account, UK emissions were about 11.0% below 1990 levels, the same as in 2005.
Ian Pearson, UK climate change and environment minister, said: The UK remains committed to a strong, effective carbon market as a central part of our efforts to combat climate change. The first phase of the EU ETS was designed as a learning phase, and important lessons have been applied to the second phase.
