The new limits have been announced in a package of reforms presented by the UK Emissions Trading Scheme Authority (UK ETS), the joint body comprising the UK Government, Scottish Government, Welsh Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland. 

The scheme has been in place since 2021 to replace the UK's participation in the European Union's ETS. It puts a limit on the total amount of greenhouse gases aviation, power and other energy-intensive industries can emit. However, from next year, the limits will be tightened to ensure industries bring their emissions down at the rate needed to reach net zero goals.

The programme incentivises decarbonisation through a process of buying and selling emissions allowances, which companies must obtain for every tonne of emissions they produce each year.

Its goal is to incentivise industries to move away from costly fossil fuels and invest in energy efficiency...