BEIS publishes carbon tax update in the event of No Deal Brexit

If the UK leaves the European Union without a deal in October, the government has confirmed a new Carbon Emissions Tax would come into effect from 4 November 2019.

On 29 July, it published an update where it explained UK participants in the EU Emissions Trading Scheme (EU ETS) would no longer take part in the event of a No Deal and that it would remove requirements relating to the surrender of EU ETS emissions allowances for the 2019 compliance year onwards. A Carbon Emissions Tax would come into force at £16/t of CO2 from November – substantially lower than current carbon prices under the EU ETS, which have risen close to €30/t of CO2 in recent weeks.

Despite this, the government assured it retained a “deep commitment” to domestic and international efforts to tackle climate change, while confirming it would look to maintain the monitoring, reporting and verification arrangements under the EU ETS to ensure as much continuity as possible.