UK Allowance

A carbon emissions allowance issued under the United Kingdom's emissions trading systems, such as the UK Emissions Trading Scheme (UK ETS). Each allowance represents the right to emit one tonne of carbon dioxide (CO₂) or its equivalent in greenhouse gases. Companies covered by the UK ETS are allocated a certain number of allowances based on their emissions profiles. These allowances can be traded, meaning that companies can buy or sell them to balance their emissions with their allocated limits. The UK ETS is designed to incentivize emissions reductions and drive investment in low-carbon technologies by putting a price on carbon emissions and allowing for flexibility in how emissions reductions are achieved.