bp (LON: BP), the British multinational oil and gas company, has voiced strong support for a 12-year extension of the UK Emissions Trading System (UK ETS), proposing the carbon market scheme run through 2042.
This recommendation was submitted in response to a public consultation by the UK ETS Authority, which is considering expanding the program’s second phase beyond its current 2030 end date, Energy News reported on Tuesday.
Implemented in 2021 following Brexit, the UK ETS is the country’s main carbon pricing mechanism.
bp emphasized that extending the scheme would provide long-term regulatory certainty, encourage investment in low-carbon technologies, and support emissions reduction goals.
The company also advocates for linking the UK ETS with the European Union’s ETS, aiming to improve efficiency and align with broader climate strategies.
This potential linkage is under review and has contributed to rising UK carbon prices.
Relevant: UK Weighs ETS Link With EU Ahead Of May Summit
On May 9, UK Allowances for December 2025 were assessed at $68.27 (£51.34) per metric ton of carbon dioxide equivalent (CO2e), compared to $78.61 (€70.32) for EU Allowances, according to Platts.
In addition, bp is pushing for the inclusion of carbon removals in the UK ETS to expand compliance options for companies.
It also recommends recognizing credits from other global carbon markets, which could further enhance the system’s flexibility and global integration.
The company supports continuing the practice of allowance banking—where businesses purchase credits for future use—citing its importance for maintaining price stability between phases.
The position expressed by bp echoes broader industry calls for a more connected and flexible carbon market, Energy News said.
Many stakeholders argue that aligning the UK and EU systems would reduce decarbonization costs and boost investor confidence.
The recent price gap between the two markets highlights the challenges of operating an isolated national carbon scheme.
The UK ETS Authority is expected to review stakeholder feedback before finalizing its decision on the system’s future framework.
Read more: bp, Equinor And Total Reach FID On $5.1 Billion Carbon Capture Projects In The UK
