(Reuters) - The British government said on Monday it will establish a domestic emissions trading scheme (UK ETS) from Jan. 1 to replace the current EU regime, as it presented its long-awaited white paper on energy policy.
Britain exits the EU ETS at the end of the Brexit transition period and had previously said it may introduce either a domestic ETS or a carbon tax.
“It will be the world’s first net-zero carbon cap and trade market, and a crucial step towards achieving the UK’s target for net-zero carbon emissions by 2050,” the government said.
It said the scheme would be more ambitious than the EU system it replaces, reducing the cap on emissions allowed within the system by 5% from day one, and may link to other international schemes in future.
ETS schemes typically force power plants, industry and in the EU’s case, also airlines, to buy permits when they emit planet-warming greenhouse gases.
In total, the plan would mobilise 12 billion pounds ($16.07 billion) of government investment to create and support up to 250,000 highly-skilled green jobs, and spur over three times as much private sector investment by 2030, according to the statement.
“Today’s plan establishes a decisive and permanent shift away from our dependence on fossil fuels, towards cleaner energy sources that will put our country at the forefront of the global green industrial revolution,” said Business and Energy Secretary Alok Sharma.
This includes 1 billion pounds for carbon capture and storage, 240 million pounds to fund 5 gigawatts (GW)of hydrogen production by 2030, and up to 385 million pounds to support new nuclear technologies.
A further 2.3 billion pounds was pledged to the rollout of electric vehicle charging points and the electrification of cars and a 6.7 billion package of measures to help low-income households with energy bills.
By 2030, Britain plans to reduce greenhouse gas emissions by at least 68% by 2030, over 1990 levels, and to ban new petrol cars.
($1 = 0.7467 pounds)
Reporting by Nora Buli in Oslo; Editing by Jan Harvey and Louise Heavens
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