© Reuters. FILE PHOTO: Drax power station is pictured during the sunset in Drax, North Yorkshire, Britain, November 27, 2020. REUTERS/Lee Smith/File Photo
LONDON (Reuters) – The authority overseeing Britain’s carbon emissions trading scheme (ETS) said a mechanism to curb costs in the scheme has not been triggered for August and would not be until November at the earliest.
Britain began trading carbon permits under its new domestic ETS on May 19, having left the European Union’s ETS since leaving the single market at the beginning of this year.
In the UK market, the supply of permits can be increased to curb high prices under a so-called cost containment mechanism, or CCM, which is triggered if average prices remain above a certain level for three consecutive months.
Last month, the business ministry said the mechanism could be triggered in August due to a period of high prices.
However, in its most recent market update published late on Monday, it said the average carbon price in July of 44.15 pounds ($61.34) a tonne was below the 44.74 pounds August trigger and therefore the cost curb mechanism would not kick in.
It also said the mechanism would not be triggered in September and October.
“The next possible opportunity for the CCM to be triggered is November 2021,” it said.
The benchmark UK carbon contract closed at 45.61 pounds a tonne on Monday.
($1 = 0.7198 pounds)
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