First Regional Carbon Trading System Set Up

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The first regional carbon trading network has been set up to prepare businesses in Yorkshire for the introduction of the Carbon Reduction Commitment (CRC) next year.

Carbon Action Yorkshire has set up a simulation in which 35 companies and public organisations will participate, buying and selling virtual carbon emissions allowances.

The CRC, which will eventually require companies to pay for their carbon emissions, will start in April 2010, with the first year dedicated to footprinting.

In 2011 emissions allowances will be sold for the first time without a limit on allowances.

The final phase will start in 2013, when emissions will be capped and allowances will be auctioned. At this stage low emitting organisations will be able to sell their surplus allowances to entities that emit more than they have accounted for.

A similar scheme is already in operation across the EU, though a combination of the impact of the economic downturn on energy consumption and the awarding of free carbon allowances has seen the prices of carbon drop by about a third since the summer.