The European Parliament has adopted an amendment (601 for, 69 against) regarding the EU’s carbon emissions trading system over concerns that a sudden UK Brexit could suddenly scrap the price of carbon. The amendment is expected to void all permits in the ETS issued by a country leaving the EU. Besides, companies and airlines will not be able to use carbon allowances issued by the UK from 2018 onwards if the country leaves the cap-and-trade program.
The EU's ETS works under the "cap-and-trade" principle and covers about 12,000 installations (45% of the EU's greenhouse gas emissions) throughout the EU territory (also including Norway and Iceland), of which 1,000 in the UK (about 8-9% of emissions). EU ETS are a key issue for the UK since the country is Europe’s second biggest CO2 emitter and its utilities are some of the biggest buyers of ETS permits. Taking into account UK's withdrawal and its impact on the EU ETS, the EU may need to reconsider its capacity to meet the current energy and climate target.
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