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Carbon Price

Volume 461: debated on Friday 15 June 2007

To ask the Secretary of State for Environment, Food and Rural Affairs (1) what his policy is on the level of carbon price which should be used to calculate emission limits for the EU Emissions Trading Scheme; (142104)

(2) what the price of carbon is; and what assessment he has made of trends in the price of carbon over the last 12 months.

The Government do not set or seek a particular price for carbon allowances. Under the EU Emissions Trading Scheme, the Government set a cap on the total emissions that may be emitted by the installations covered by the scheme in the UK, as does every other member state for their installations. The total EU cap sets a limit on allowances available in the market and the demand for allowances from installations to cover their emissions then determines the price.

The price for a carbon allowance for one tonne of CO2 in phase I carbon price was €0.24 at market close on 12 June. The forward price for phase II 2008 allowances was €22.61 at close on 12 June.