Carbon allowance FAQs
Straight answers for compliance and finance teams buying UK Allowances (UKAs) and EU Allowances (EUAs): what the units are, surrender deadlines under both schemes, registry accounts, auction versus secondary execution, and how a fully online journey keeps execution costs lean. 14 answers across four categories, every scheme date checked against the published rules.
The basics
What is a carbon allowance?
A carbon allowance is the tradeable unit of an emissions trading scheme: one allowance covers one tonne of carbon dioxide equivalent (CO2e). The UK Allowance (UKA) is the unit of the UK Emissions Trading Scheme and the EU Allowance (EUA) is the unit of the EU ETS. Regulated operators must hand allowances back each year to cover their verified emissions, which is what gives the unit its value. For the full plain-English picture, start with what carbon allowances are and who needs them.
What is the difference between a UKA and an EUA?
They belong to two schemes that have run separately since the UK left the EU ETS: two markets, two registries and two prices. A UKA can only be surrendered under the UK ETS and an EUA only under the EU ETS; they are not interchangeable, and the price gap between them moves daily. Which one you need depends on where your regulated installations or routes sit. Our comparison of how the UK and EU emissions trading schemes compare walks through the differences and which scheme your sites fall under.
Who actually needs carbon allowances?
Operators of installations regulated under either scheme. In the UK that means approximately 1,000 energy-intensive installations, including power stations, oil refineries, steel works and cement plants, plus aviation operators on relevant routes. Beyond compliance, any business can buy and retire allowances voluntarily as part of a Scope 1 net-zero claim. If you are not sure whether your sites are in scope, the overview of carbon allowances for UK businesses is the place to start.
Compliance and surrender
What does surrendering allowances mean, and when are the deadlines?
Surrender is the compliance act at the heart of both schemes: once a year, an operator hands back allowances equal to its verified emissions for the previous scheme year, through its registry account, and the surrendered allowances are cancelled. The two schemes no longer share a date. Under the UK ETS, the verified emissions report is due by 31 March and surrender follows by 30 April. Under the EU ETS, the 2023 revision of the directive moved surrender from 30 April to 30 September, applying from 2024 onwards. If you hold obligations in both schemes, the two deadlines need separate buying plans, and we run compliance-cycle alerts ahead of each one.
What happens if we surrender too few allowances on time?
Both schemes apply an excess emissions penalty of 100 per tonne not covered (pounds under the UK scheme, euros under the EU scheme), adjusted for inflation, and paying the penalty does not clear the debt: the missing allowances still have to be bought and surrendered on top. That is why the sensible approach is to build the position through the year rather than chase the market in the final weeks before the deadline.
What is the difference between compliance buying and voluntary retirement?
Compliance buying covers a legal obligation: regulated operators must surrender allowances against their verified emissions. Voluntary retirement is open to any business: you buy UKAs or EUAs and permanently retire them so no emitter can ever use them, typically to back a Scope 1 net-zero claim. The allowances are identical; what differs is why you are buying and what happens at the end. We run a voluntary retirement workflow alongside the compliance desk, with the evidence trail the claim needs.
Buying allowances
Do we need a registry account?
If you operate a regulated installation you will already hold one, because surrender happens through it: an account in the UK Emissions Trading Registry for the UK scheme, or in the Union Registry for the EU scheme. What you do not need is exchange membership or your own trading infrastructure: we route trades through regulated broker counterparties, and for voluntary retirement we run the workflow and the evidence trail for you.
Should we buy at auction or on the secondary market?
Both routes end in the same allowance. Primary auctions release new allowances on a published government calendar at a single clearing price; UK ETS auctions are hosted by ICE Futures Europe on behalf of the UK government. The secondary market trades continuously, which gives you control over timing and lets a position be built in stages through the compliance year. Auction-window versus secondary-market execution guidance is part of the mandate, so the route is chosen per order, not by default.
Can we see live prices before we commit to anything?
Yes: the prices we trade against are published on this site and updated through the day. See the live UK allowance price we trade against for the daily UKA settlement, forward curve and the spread versus the EU scheme, and the live EU allowance price we trade against for the daily EUA settlement in EUR with a GBP equivalent. Check the level first, then start the order when the number works for you.
How does the online buying journey actually work?
Digitally, end to end. You tell us the scheme and the volume, we return a live quote priced against licensed wholesale feeds, you approve it online, and execution and delivery follow with no phone calls required. Registry steps and surrender timing are tracked in the same thread, so the audit trail builds itself. Our guide to how to buy carbon allowances online walks through every step, from registry accounts to execution and surrender.
Working with Purely Energy
How is Purely Energy paid on an allowance trade?
Through a per-trade broker fee, shown alongside the underlying allowance price on every trade ticket. Nothing is bundled and nothing is hidden in the rate: you see the market price and our fee as separate lines before you approve the order. We work for you, not the suppliers, and the ticket is the proof.
Why does an online journey keep execution costs lean?
Because the journey is digital from quote to execution, there is no phone-based sales operation to fund: no call-backs, no re-keying, no broker theatre. Quotes are priced against live licensed feeds and approved online, which keeps the desk lean and the execution cost on your ticket lean with it.
Do you also handle SECR, ESOS and carbon accounting?
Yes. Allowances are one half of the carbon workstream; the other is the reporting retainer covering SECR filings, ESOS Phase 4 audits and Scope 1, 2 and 3 accounting to the GHG Protocol, with surrender-deadline alerts built in. Many clients run both with us so the same evidence base serves the filings and the trades. The full scope is set out in our SECR and ESOS reporting services.
How do we start an allowance order?
Tell us the volume and the scheme: the journey runs online from quote to execution. Start your allowance order and the desk comes back with a live quote. There is no obligation until you approve the ticket.
Question not covered here?
Ask us directly. Tell us the scheme and the volume and the desk comes back with a live quote, broker fee on the ticket, no obligation until you approve it. Or call 0161 521 3400 if you would rather talk it through first.