Two markets, one comparison
UK ETS vs EU ETS: how the two schemes compare
Since January 2021 the UK has run its own emissions trading scheme alongside the EU's. Same cap-and-trade logic, but two units, two registries, two auction venues, two prices and, the one that catches compliance teams out, two different surrender deadlines.
This guide sets the schemes side by side so you can see which one your sites fall under, and what differs when you hold obligations in both.
One scheme became two
Until the end of 2020, UK installations complied with the EU Emissions Trading System, the cap-and-trade market the EU has run since 2005. On 1 January 2021 the UK ETS replaced UK participation in the EU ETS, carrying the same architecture across: a falling cap on total emissions, allowances auctioned and traded under that cap, and an annual surrender of allowances against verified emissions.
Both schemes price carbon the same way: one allowance permits one tonne of CO2 equivalent. If the mechanics are new to you, start with what carbon allowances are and who needs them, then come back for the differences.
The schemes share a design but not a market: each has its own registry, auction venue, price and compliance calendar. Treating them as one market is the most common mistake we see.
The two schemes at a glance
The structural differences in one view, each unpacked in the sections that follow.
| UK ETS | EU ETS | |
|---|---|---|
| Launched | 1 January 2021, replacing UK participation in the EU ETS after Brexit | 2005, the world's first and largest international carbon market |
| Compliance unit | UK Allowance (UKA), one tonne of CO2 equivalent | EU Allowance (EUA), one tonne of CO2 equivalent |
| Who is covered | Around 1,000 energy-intensive installations, power generation and aviation; domestic maritime joins from 1 July 2026 | Power, industry and intra-EEA aviation across 27 member states plus Iceland, Liechtenstein and Norway; maritime since 2024 |
| Registry | UK Registry | Union Registry |
| Primary auctions | ICE Futures Europe, fortnightly, on behalf of the UK government | EEX, the common auction platform, several auctions each week |
| Verified emissions report due | 31 March | 31 March |
| Surrender deadline | 30 April | 30 September (moved from 30 April by the 2023 revision, from 2024) |
| Price quoted in | GBP per tonne | EUR per tonne |
Scope: who has to comply
The UK ETS covers around 1,000 energy-intensive installations: power stations, oil refineries, steel works, cement plants and similar large combustion sites, plus aviation on domestic UK routes and flights departing the UK for the EEA. From 1 July 2026 the scheme expands to domestic maritime, bringing cargo and passenger ships of 5,000 gross tonnage and above within scope for voyages between UK ports.
The EU ETS is much larger: it covers roughly 40 percent of the EU's total greenhouse gas emissions across the 27 member states plus Iceland, Liechtenstein and Norway. Power generation, energy-intensive industry and intra-EEA aviation form the core, and shipping joined from 2024, phased in at 40 percent of verified emissions for 2024, 70 percent for 2025 and 100 percent from 2026.
The schemes also overlap in places. Electricity generators in Northern Ireland remain in the EU ETS rather than the UK scheme, and a UK group with EU installations, intra-EEA flights or ships calling at EU ports can hold obligations on both sides at once. Each obligation has to be met inside its own scheme, with its own unit.
Units, registries, auctions and deadlines
The UK ETS trades UK Allowances (UKAs) and the EU ETS trades EU Allowances (EUAs). Each permits one tonne of CO2 equivalent, but they are not interchangeable: a UKA cannot be surrendered against an EU obligation, and an EUA cannot be surrendered against a UK one. The units live in different systems too. UKAs are held in accounts in the UK Registry; EUAs sit in the Union Registry. Compliance in both schemes means accounts, holdings and surrenders in both.
Primary supply reaches the market through different venues. UK allowance auctions are hosted fortnightly by ICE Futures Europe on behalf of the UK government. EU auctions run several times a week through EEX, the common auction platform, and both units also trade continuously on the secondary market.
The calendars used to mirror each other; they no longer do. Both schemes require the verified emissions report by 31 March, and the UK ETS keeps the traditional surrender deadline of 30 April. The EU ETS moved its deadline to 30 September under the 2023 revision of the directive, effective from 2024. Five months separate the two surrender dates, so a team running both obligations off one compliance calendar will get one of them wrong.
What the price spread means in practice
Two caps and two supply schedules produce two prices. UKAs are quoted in pounds, EUAs in euros, and the gap between them, the spread, widens and narrows daily with auction supply, policy announcements, energy prices and hedging demand on each side. We publish the live UK allowance price we trade against and the live EU allowance price we trade against, including the spread between them, so you always have today's numbers rather than a stale figure in an article.
What the spread does not do is let you arbitrage compliance: however the prices sit, you cannot surrender the cheaper unit in the other scheme. What it does affect is budgeting and timing. Each scheme gives you a window between verified emissions and surrender, and where you execute inside that window, auction or secondary, early or late, is the lever a good desk manages.
Two developments pull the markets closer together. The Carbon Border Adjustment Mechanism ties UK exporters to EU carbon costs from 2026 even if they hold no EU installations. And the UK and EU committed in May 2025 to link the two schemes, with negotiations now under way. Until a linking agreement is in force, though, plan on two markets, two prices and two deadlines.
UK ETS vs EU ETS: the questions teams ask
- Is the UK ETS linked to the EU ETS?
- Not yet. The UK and EU committed in May 2025 to link the two schemes, and formal negotiations are under way. Until a linking agreement is in force, the markets stay separate: allowances are not interchangeable, prices move independently, and each scheme keeps its own registry and surrender deadline.
- Can a UKA be used for EU ETS compliance?
- No. A UK Allowance can only be surrendered in the UK Registry against a UK ETS obligation, and an EU Allowance can only be surrendered in the Union Registry against an EU ETS obligation. A business regulated under both schemes has to buy and surrender both units, in the right registries, by two different deadlines.
- Why are UK and EU carbon prices different?
- Because they are two markets with two caps. Each scheme sets its own allowance supply, auction calendar and policy direction, and demand comes from different pools of installations and traders. The result is two prices that move independently, with a spread between them that changes through the day.
- Which surrender deadline applies to my business?
- UK ETS operators report verified emissions by 31 March and surrender UKAs by 30 April. EU ETS operators also report by 31 March, but surrender EUAs by 30 September, a deadline the 2023 revision moved back from 30 April with effect from 2024. If you hold obligations in both schemes you run both calendars.
Registries, voluntary retirement and pricing are covered in the full set of carbon allowance questions answered.
Which scheme applies to you
- UK ETS: regulated installations in Great Britain, domestic UK aviation and UK departures to the EEA, and domestic shipping from July 2026. You buy and surrender UKAs in the UK Registry by 30 April.
- EU ETS: installations in the EU or EEA, intra-EEA flights, ships calling at EU ports, and electricity generation in Northern Ireland. You buy and surrender EUAs in the Union Registry by 30 September.
- Both: groups with operations on each side of the Channel run both calendars and both registries, which is exactly the case our desk is built for.
- Neither, by choice: businesses outside both schemes can still retire UKAs or EUAs voluntarily as part of a net-zero claim.
Whichever side you land on, the journey with us is the same: carbon allowances for UK businesses run digital end to end, with live pricing and lean execution costs, and no phone calls required. The step-by-step version is in our guide to how to buy carbon allowances online, and if the obligation comes with SECR or ESOS filings attached, our SECR and ESOS reporting services sit alongside the allowance desk. We work for you, not the suppliers.
Know your scheme? Start the order
UKA or EUA, auction window or secondary market, the journey runs online from quote to execution and the live price is on screen the whole way.