The UK carbon floor and power plant hedging

Vytautas Jurenas, Cyriel de Jong
05 May 2016

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In April 2013, the UK government brought into force a tax on carbon emissions as a part of its Electricity Market Reform (EMR). The legislative target to promote decarbonisation is formulated as a carbon price floor (CPF), ie a minimum level of carbon cost to be achieved in the UK domestic market. In the 2014 Budget, it was announced that the carbon price support will be capped at £18 per tonne of carbon dioxide (tCO₂) until March 2020. This is lower than was planned initially, but is still a

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