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The UK’s role in building global high-integrity carbon markets

The UK's offer

  • Leading expertise built over two decades of practice in carbon markets
  • A growing sector with strong UK government backing and a supportive regulatory environment
  • A global financial centre with a large pool of investors and capital
  • World-class standard-setters and research institutions

Pioneering expertise in carbon markets

The United Kingdom has been a committed partner in the global development of high-integrity carbon markets over the last two decades. In 2002 the UK launched the first pilot of a national carbon trading scheme. Many of the technical design features pioneered for the scheme informed the development of the EU Emissions Trading Scheme (ETS) launched in 2005 and became part of a blueprint for compliance markets around the world.  

The UK’s contribution to the innovation of carbon markets helped to launch an ecosystem of carbon project experts and associated investors, lawyers, regulators and academics, positioning the UK as a global hub for the topic.

Building trust in carbon markets 2.0

More recently, the UK has enabled high-integrity global governance initiatives which bolster confidence in carbon credits. The IC-VCM’s Core Carbon Principles, VCMI’s Claims Code of Practice, and the Oxford Offsetting Principles were largely developed in the UK. These standards demonstrate the commitment from UK actors to support carbon markets which are high-quality, verifiable, and contribute to real-world emission reductions and removals. 

The UK has also established itself as a leader in climate diplomacy, supporting developing, emerging and transition countries establish domestic carbon markets. UK expertise has been shared with nearly 30 countries over the last decade, via the World Bank’s Partnership for Market Readiness and the Partnership for Market Implementation and through domestic international climate cooperation programmes. 

The UK private sector is leading on developing key components of market infrastructure to support global high-integrity carbon markets. By leveraging our highly regulated and standardised compliance frameworks of banks and our trading and clearing infrastructure, we are making it easier for buyers to access the market and building a more liquid and transparent market.  

£75bn

The UK’s Emissions Trading Scheme (ETS) has reached a value of around £75 billion per year in carbon trading.

60Mt

Internationally, UK corporates have retired nearly 60 megatons of carbon dioxide (MtCO2) in carbon credits for voluntary commitments between 2009 and 2021.

3bn

ICE Futures Europe, a major commodities exchange based in London, has hosted over three billion carbon credit trades over the past two decades

78bn

The UK Continental Shelf (UKCS) has enough potential capacity to safely store up to 78 billion tonnes of carbon, one of the largest potential CO2 storage capacities in Europe.

How the City of London Corporation supports opportunity in high-integrity carbon markets

The City of London Corporation (CoLC) is the governing body of the Square Mile dedicated to a vibrant and thriving City, supporting a diverse and sustainable London within a globally successful UK. We provide the secretariat to the UK Carbon Markets Forum, and we are also a founding sponsor of the Integrity Council for the Voluntary Carbon Market (IC-VCM). 

Beyond this policy work, we operate a Carbon Removals and Land Management Project as part of our Climate Action Strategy to protect the existing carbon stored by our open spaces and to increase their carbon sequestration capacity. Our open spaces currently remove over 16,000 tonnes of carbon from the atmosphere every year.

CoLC has championed the role of private finance in enabling carbon markets via its presence at the annual UN Climate Change Conference (COP) since 2021. We aim to educate policymakers and investors on the role of high-integrity carbon markets to support climate objectives. 

About the UK Carbon Markets Forum

The UK Carbon Markets Forum is a private sector initiative, chaired and established by Dame Clara Furse, with the encouragement of HM Treasury. The City of London Corporation provides secretariat support.

The Forum seeks to operationalise a high integrity carbon market ecosystem in the UK and to leverage the UK’s potential as a global centre for carbon market activities. Its members reflect a range of stakeholders from the corporate, financial, legal, and non-profit sectors.

We believe that a high-integrity, global carbon market can deliver private funding to climate and nature-positive investments, potentially channelling billions of dollars of investment from the Global North to the Global South.

For more information about the Forum, please contact vcm@cityoflondon.gov.uk.

Insights from the UK Carbon Markets Forum

Watch Catherine McGuinness, City of London’s representative on the UK Carbon Markets Forum and James Davis, Oliver Wyman’s Co-head of Climate and Sustainability in Europe discuss the potential of carbon dioxide removals. 

Accelerating Carbon Dioxide Removal: Unlocking the UK's potential to support global net zero

Accelerating Carbon Dioxide Removal: Unlocking the UK's potential to support global net zero

Enabling the Voluntary Carbon Market in the context of the Paris Agreement

Enabling the Voluntary Carbon Market in the context of the Paris Agreement

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