How the UK Gov is Aiming to Integrate Carbon Removal by 2029

As well as helping to reduce the outcomes of global warming and reach the goals set by the Paris Agreement, carbon removal methods can also benefit flood prevention and biodiversity, according to the UK Government.

The UK Government, alongside the devolved administrations of Scotland, Wales and Northern Ireland, has taken a major step towards net zero with its July 2025 plan to integrate Greenhouse Gas Removals (GGRs) into the UK Emissions Trading Scheme (ETS). 

This move helps to solidify the UK’s commitment to environmental integrity, market efficiency and long-term climate resilience.

A market for decarbonisation

At the heart of this policy is the ambition to create a single, cost-effective carbon market that values both emissions reductions and verified carbon removals. 

The UK ETS, traditionally a mechanism to incentivise decarbonisation through tradable allowances, will now include high-integrity GGRs. 

These removals are critical for addressing residual emissions from hard-to-abate sectors such as aviation and heavy industry.

To preserve market stability and environmental ambition, GGR allowances will replace existing emissions allowances on a one-for-one basis. 

“Today we keep our promise to launch a whole new clean energy industry for our country - carbon capture and storage - to deliver thousands of highly skilled jobs and revitalise our industrial communities,” says Ed Miliband,

Secretary of State for Energy and Climate Change of the UK.

“We are making the UK energy secure and backing our engineers, electricians and welders so we can protect families and businesses and drive jobs through our Plan for Change.”

This ‘gross cap’ approach ensures no increase in the overall number of allowances while enabling GGR operators to enter the market with confidence.

Principles and policy safeguards

The integration is underpinned by eight guiding principles, including environmental integrity, simplicity and long-term efficiency. 

Notably, the policy framework includes:

• Strict permanence criteria: Only GGR projects that demonstrate a minimum carbon storage duration of 200 years will qualify.
   
• Ex-post allowance issuance: Operators will receive ETS allowances only after removals have occurred and been verified under the UK GGR Standard, ensuring transparency and accountability.
   
• Domestic-only eligibility: Initially, only UK-based removals will be eligible, strengthening alignment with the UK's carbon budgets.
   
• Market access via auctions: The UK ETS Authority will facilitate access to the market by auctioning removal allowances, potentially through product mix auctions to maintain market liquidity.

“We promised to revitalise our nation’s industrial heartlands, create good jobs, make Britain a clean energy superpower and grow our economy to put more money in working people’s pockets,” says Rachel Reeves, UK Chancellor of the Exchequer.

Carbon reversal events

To account for the risk of carbon reversal (e.g. leakage, fires or storage failures), the scheme introduces buffer pools, a form of insurance whereby a portion of stored carbon is set aside and cannot be traded. 

This mechanism helps preserve the integrity of the system, particularly for less permanent removal types, though geological storage projects may be exempt due to low reversal risk.

Liability for any re-release of stored carbon lies with the operator, further encouraging responsible storage and long-term maintenance of carbon sinks.

A timeline to 2029

The government aims to legislate for GGR integration by the end of 2028, with operational implementation set for 2029. 

No demand-side restrictions will be placed on the use of removal allowances but transitional supply controls will be introduced to manage market entry responsibly.

Woodland inclusion

While engineered removals will be the focus for initial integration, the Authority has not yet decided whether to include high-quality woodland removals. 

New evidence suggests UK woodland could meet permanence requirements and contribute to net zero targets, but concerns remain around cost, permanence and market impact. 

A final decision is expected later this year.

Key steps to take

The Climate Change Committee (CCC) is an independent non-departmental public body, formed under the Climate Change Act (2008) to advise the United Kingdom and devolved Governments and Parliaments on tackling and preparing for climate change.

In line with the integration, the CCC has created 43 priority recommendations to put the country back on track.

Within these recommendations, there are seven core themes:

• Cheaper electricity: Shift policy levies off electricity bills to make low-carbon tech like EVs and heat pumps more attractive. Cheaper electricity drives wider adoption across homes, industry and transport.
• Removing barriers: Speed up planning, grid connections and approvals so homes and businesses can adopt EV charge points, heat pumps and electrified processes. A stronger grid is vital for energy security and lower bills.
• Providing certainty: Where solutions are clear, the government should back them with firm decisions and phase-out dates. Certainty boosts confidence for investors and consumers, this includes ruling out hydrogen for home heating.
• Supporting low-carbon heating: Help households, especially low-income, overcome upfront costs for heat pumps. Address price signals, misinformation and awareness to accelerate adoption.
• Backing businesses: Clarify how government support complements carbon pricing and border taxes. With the right policies, UK industries can lead in low-carbon markets. Support is also needed for sustainable land use.
• Building skills for transition: Workforce growth is critical for system-wide changes like electrification. Government and industry must plan ahead to manage disruption and open up new job opportunities in affected communities.
• Engaging the public: Government should lead a clear engagement strategy, providing trusted, actionable information on reducing emissions and the benefits of low-carbon choices.

This phased, cautious integration of GGRs into the UK ETS signals a maturing carbon market, one that prizes durability, verification and cost-effectiveness. 

As engineered removals scale and nature-based solutions are further evaluated, the UK ETS could become a global model for harmonising emissions reductions and carbon removal in a single market framework.