The Climate Change Act 2008 (Credit Limit) Order 2026
Set a limit of zero carbon units that may be credited to the net UK carbon account for the 2028-2032 budgetary period, excluding units related to emissions trading schemes.
The Climate Change Act 2008 (Credit Limit) Order 2026 establishes the maximum amount of carbon units that can be credited to the net UK carbon account for the 2028-2032 budgetary period.
It directs that this limit be set at zero, effectively preventing the use of international carbon credits to meet national carbon budgets for that specific timeframe, except for units associated with emissions trading systems.
The order applies to the calculation of the net UK carbon account, overseen by the Secretary of State and relevant national authorities in the devolved administrations.
Arguments For
The order states that the Secretary of State took into account the advice of the Committee on Climate Change regarding the 2028-2032 budgetary period as required by section 11(7)(a) of the Act.
The document notes that the Secretary of State consulted with national authorities in Scotland, Wales, and Northern Ireland prior to laying the instrument.
The explanatory note asserts that no significant impact on the private, voluntary, or public sectors is foreseen, justifying the absence of a full impact assessment.
Arguments Against
Legal scholars might question the practical impact of setting a zero-credit limit given the exemptions provided for emissions trading systems.
Environmental policy analysts could point to potential ambiguities regarding what constitutes a 'replacement' for the EU Emissions Trading System under Article 2(3).
Affected industries may raise concerns if future domestic or international carbon units they hold cannot be used to offset the net UK carbon account due to the zero-limit restriction.
Citation, commencement and extent
- -(1) This Order may be cited as the Climate Change Act 2008 (Credit Limit) Order 2026.
- (2) This Order comes into force on the day after the day on which it is made.
- (3) This Order extends to the United Kingdom.
This section establishes the formal title of the statutory instrument and specifies its effective date as the day following its enactment.
It also defines the geographical reach of the order, confirming it applies across all four nations of the United Kingdom.
Limit on the net amount of carbon units
- -(1) The limit on the net amount of carbon units( c ) that may be credited to the net UK carbon account for the 2028-2032 budgetary period is 0 carbon units.
(2) Carbon units credited to or debited from the net UK carbon account in connection with the operation of the EU ETS in respect of each year of the 2028-2032 budgetary period in accordance with regulations made under section 27(3) of the Act do not count towards the limit in paragraph (1).
(3) In this article, 'EU ETS' means the EU Emissions Trading System established by Directive 2003/87/EC of the European Parliament and of the Council( a ) and includes any replacement for that emissions trading system that has effect for any part of the 2028-2032 budgetary period.
This section mandates that for the five-year budgetary period starting in 2028, no carbon units may be credited to the UK's net carbon account to meet emissions targets.
However, it provides an exception for units managed under the European Union Emissions Trading System (EU ETS) or any successor system.
These trading system units are excluded from the zero-limit restriction and are handled according to existing regulatory frameworks for carbon accounting.
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