UK considers linking carbon market to EU trading system

The UK government is considering connecting its carbon market with the European Union's trading system. This announcement came in a statement released late Thursday. Minister Philip Hunt noted that there is ongoing discussion about this potential link. However, he did not provide specific details about when or if this might happen. The news has triggered a rise in the price of UK carbon permits, which are currently cheaper than those in the EU. Hunt's comments were made ahead of a UK-EU summit scheduled for May 19. He emphasized that these discussions do not guarantee any specific outcome with the EU. Financial secretary Spencer Livermore mentioned last week that the government is looking for ways to enhance trade with the EU, including possibly linking emissions systems. A group consisting of UK and European lawmakers recently called for a review of connecting the carbon markets. Since Livermore's comments, UK carbon futures for December increased by over 20%. The latest remarks echo a previous post-Brexit agreement that suggested serious consideration of a market link, but Hunt's statement indicates discussions are currently more active.