The EU ETS sits at the centre of our long term strategy to deliver progressively lower emissions from electricity generation over time. From 2013, the EU ETS cap on carbon emissions will reduce by 1.74 per cent. of 2005 emissions each year, delivering an overall reduction of 21 per cent. below 2005 verified emissions by 2020. Also from 2013, all emissions allowances will be auctioned to the power sector in the UK which will provide further incentive to the sector to reduce emissions.
DECC supports innovation in carbon abatement technologies and has launched one of the world's first full scale carbon capture and storage demonstration projects. In addition, the DECC Environmental Transformation Fund recently announced a £15 million joint call for proposals with the Technology Strategy Board and Northern Way to demonstrate component parts and pilot scale projects on carbon abatement technologies.
The Government are also supporting the wider deployment of CCS through the introduction of the Energy Act 2008 which includes one of the first legal regimes in the world to regulate the long-term offshore storage of carbon dioxide deep underground.