Written question WQ86848
- Asked by
- Janet Finch-SaundersConservative
- To be answered by
- Minister for Climate Change
- Tabled
- Due
- Answered
- Time to answer
- 9 days
Question
Further to WQ86480, what consideration has the Welsh Government given to the fact that proposals to cut the UK ETS cap by 50 percent by 2024 without addressing the impacts of financial speculators adopting hedging positions in the allowance market will put Welsh industry at a disadvantage with global competitors?
Answer
Answered by Minister for Climate Change
Hedging is a practice undertaken by compliance entities like the industrial emitters rather than non-compliance entities such as financial speculators. Financial speculators, by participating in auctions and secondary markets can provide useful liquidity in the UK ETS, and support market functioning.
The UK ETS Authority, which the Welsh Government is a joint member of, recognise that protecting market integrity is crucial from both a domestic and global perspective. The UK ETS has market oversight rules in place to guard against market abuse through the UK Market Abuse Regulation, which we continue to develop and improve. The “Developing the UK ETS” consultation earlier this year proposed an ongoing objective for UK ETS markets policy to guard against market abuse and activity that could significantly destabilise UK ETS markets. The UK ETS Authority intends to set out detailed markets policy proposals, subject to responses, in due course.