Scotland is part of the UK Emissions Trading Scheme (UK ETS), the United Kingdom’s carbon emissions trading scheme. The scheme places an overall limit on emissions from large industrial sites and airlines, and facilitates the trading of emissions allowances within this limit.

The Scottish Government would like to understand how emissions from sites subject to the UK ETS are likely to evolve over the transition to net zero greenhouse gas emissions and the implications of steadily reducing the number of permits in the emissions trading scheme.

This study introduced a UK ETS accounting mechanism to the Scottish TIMES model, which is a diagnostic tool to help understand the key inter-relationships across the energy system. This will enable the Scottish Government to investigate these questions.

The Scottish TIMES model is being used by the Government to produce a new net zero pathway for Scotland to support its new Climate Change Plan.

Scottish TIMES does not distinguish between ETS and non-ETS emissions. By adding this capability, ETS emissions can be constrained separately to the overall Scottish emissions target.

The proportion of emissions subject to ETS was estimated for each sub-sector of Scottish TIMES and used to calculate ETS emissions in the model. A flexible mechanism was created to try to enable future changes to the UK ETS to be easily implemented. We created example scenarios with emission constraints and taxes for ETS emissions. A series of tests demonstrated that the model was working correctly.

For further information, please download the report.

If you require the report in an alternative format such as a Word document, please contact info@climatexchange.org.uk or 0131 651 4783.