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)

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.