EMISSIONS: UK ETS Free Allocation Fall 14% in 2025, Largest Drop Since 2021

Free UKA allocations to operators are dropping by 14%, or 4.5mn allowances, on the year to 26.5mn allowances in 2025, the government said. 

• This compares to an average annual reduction rate in the prior three years of 6%.
• Free allocations are now 30% lower than 2021 levels.
• The drop resulted from the 4.34mn allowance reduction from Port Talbot Steelworks, the largest steelworks in the UK and one of the largest in the world.
• The top 13 installations account for 50% of the allocations, with their allocation remaining unchanged from 2024.
• A total of 422 installations are given free allocations in 2025, compared with 432 installations in 2024.
• 88% of the installations were given the same allocation as last year.