Value for Money
UK Emissions Trading Scheme
Published 30 June 2025
6 recommendations
Department for Energy Security and Net Zero
Climate change and net zeroEnergy and environment
nao.org.uk
This report reviews the UK Emissions Trading Scheme and its progress to date, as well as reviewing future risks and potential difficulties.
Recommendations (6)
Source: NAO Recommendations Tracker
Department for Energy Security and Net Zero
Rec 1
Accepted
Work in Progress
The Authority should:
consider its approach to prioritising the development and introduction of new policies to take account of its own capacity and that of the Scheme participants. It should also consider its approach to working with the other parts of government with responsibilities for the UK?s industrial and energy sector.
Department for Energy Security and Net Zero
Rec 2
Accepted
Work in Progress
The Authority should:
collect evidence on the type and value of investment in low-carbon technologies made by the Scheme?s participants, including the extent to which this has been driven by the carbon price. It should use this to help inform its understanding of the future path of emissions reductions under the Scheme and consequently how the Scheme will support emissions reductions in each of the sectors to which it applies.
Department for Energy Security and Net Zero
Rec 3
Accepted
Work in Progress
The Authority should:
enhance its existing annual reports on the functioning of the UK ETS carbon market, by including a broader commentary on the Scheme?s performance.
Department for Energy Security and Net Zero
Rec 4
Accepted
Work in Progress
The Authority should:
improve its communications with the Climate Change Committee to help it anticipate the Committee?s advice, and to support the Committee?s understanding of its modelling.
Department for Energy Security and Net Zero
Rec 5
Accepted
Implemented
The Authority should:
make sure, as it expands the Scheme into new sectors, the monitoring and verification arrangements it is developing reflects those sectors? specific characteristics.
Department for Energy Security and Net Zero
Rec 6
Accepted
Work in Progress
The Authority should:
review the effectiveness of these arrangements as part of its approach to monitoring and evaluation, and take action in response to any limitations identified.