Britain intends to stay in Europe's carbon market until at least 2020

FILE PHOTO: Britain's Minister of State for Energy and Clean Growth Claire Perry arrives In Downing Street in London, March 6, 2018. REUTERS/Peter Nicholls

LONDON (Reuters) - Britain intends to remain in Europe’s emission trading system (ETS) until at least the end of its third trading phase running from 2013-2020, Britain’s energy minister said on Wednesday.

The status of Britain’s participation in the scheme following the country’s exit from the European Union in March 2019 had been unclear until now.

Energy and clean growth minister Claire Perry said it had yet to be formally agreed with European lawmakers but the government wanted to provide certainty for companies covered by the scheme until at least the end of phase three.

She was speaking to members of the cross-party EU Energy and Environment Sub-Committee, in the upper house of parliament.

Britain is the second-largest emitter of greenhouse gases in Europe and as a result its utilities and industry are among the largest buyers of permits in ETS, which charges power plants and factories for every ton of carbon dioxide (CO2) they emit.

Companies from these sectors have urged Britain to stay in the scheme until the end of the current trading phase to avoid disruption, but are divided over Britain’s longer term participation in the scheme.

Perry said Britain is committed to using a price on carbon as a means to reduce emissions but would use the country’s exit from the European Union to “take the opportunity to see if there are other opportunities” to achieve this.

Rules of the ETS are set by the European Parliament, and enforced by the European Court of Justice, and industry experts have said it could be politically difficult to justify staying within the scheme.

Britain has a legally binding target to cut emissions of harmful greenhouse gases, such as those produced by fossil-fuel-based power plants, by 80 percent from 1990 levels by 2050.

Reporting by Susanna Twidale; Editing by Louise Heavens and Edmund Blair