The UK will abolish its Carbon Price Support levy in 2028, signalling a strategic shift from targeted fossil fuel taxes to reliance on the emissions trading system to drive decarbonisation and maintain industrial competitiveness amid volatile energy costs.
The UK will remove its Carbon Price Support levy from April 2028, ending a tax that has helped push coal out of the power system and leaving the country to rely more heavily on its emissions trading regime to drive further decarbonisation.
In a statement to the House of Commons on 16 April, Exchequer Secretary to the Treasury Dan Tomlinson said the levy had “fulfilled its purpose”. Introduced in 2013, Carbon Price Support was designed to make fossil-fuelled electricity generation more expensive by adding to the carbon price faced by power producers. Its abolition will simplify the UK’s carbon pricing structure at a moment when ministers are also trying to relieve pressure on industrial energy bills.
The timing is significant for heavy energy users. Britain has already completed its coal exit from the electricity grid, and the government argues that the additional levy is no longer needed now that coal is gone and the UK Emissions Trading System is doing the core work of pricing carbon. Permits in that market are trading at around £49 a tonne, according to the material released alongside the announcement.
The Institute for Fiscal Studies said the policy had done what it was meant to do, strengthening the carbon price above the ETS level when coal still played a major role in power generation. That assessment matters for industrial decarbonisation because it frames the move less as a retreat from carbon pricing than as a shift towards a leaner system once the original policy objective has been met.
The change also comes against a difficult energy-cost backdrop. Even with recent easing in the UK price cap, broader market volatility and geopolitical tensions are keeping the risk of higher bills alive for households and businesses alike. For manufacturers, especially those exposed to international competition, the question is increasingly not whether carbon policy will endure, but how to structure it without layering on unnecessary costs.
That balance is also shaping policy elsewhere in Europe. The European Commission has set out plans to cut electricity taxes and grid charges as part of a wider effort to save consumers and industry hundreds of billions of euros a year by 2040. The direction of travel is similar: preserve support for decarbonisation, but reduce the immediate cost burden of the transition.
In the UK, ministers are also expanding targeted help for industry. The British Industrial Competitiveness Scheme is due to widen from 7,000 to 10,000 manufacturers, offering electricity bill relief of up to 25% through exemptions from some green levies. Officials say ending Carbon Price Support will help offset that support across the system.
For investors and executives, the broader signal is that Britain is narrowing the number of overlapping instruments in its power-sector carbon policy. RWE said the change had been expected in wholesale forward prices, while also pointing to the importance of UK-EU emissions trading linkage arrangements in managing the transition smoothly.
The UK’s Clean Power 2030 target remains in place, underscoring the government’s view that a faster move away from fossil fuels is still the best protection against price shocks. But the latest decision shows how carbon policy is being recalibrated for a post-coal system: less about imposing extra penalties on power generators, and more about preserving decarbonisation while trying to keep industry competitive.
- https://esgnews.com/uk-to-scrap-carbon-tax-on-power-by-2028-as-coal-exit-reshapes-energy-policy/ – Please view link – unable to able to access data
- https://www.gov.uk/guidance/climate-change-levy-rates – The UK government provides detailed information on Climate Change Levy (CCL) rates, including Carbon Price Support (CPS) rates applicable to electricity generation. CPS, introduced in 2013, adds a tax on carbon emissions from fossil fuel power plants, with rates specified for gas, petroleum gas, and coal. The rates are set to remain in effect until 31 March 2028, after which they are scheduled to be removed, aligning with the government’s plan to phase out coal from the power grid by 2024.
- https://ifs.org.uk/articles/response-scrapping-carbon-price-support – The Institute for Fiscal Studies (IFS) discusses the UK government’s decision to abolish the Carbon Price Support (CPS) from April 2028. CPS, a tax on carbon emissions from electricity generators, was introduced in 2013 to strengthen the carbon price above the Emissions Trading Scheme (ETS) price. The IFS notes that CPS has fulfilled its purpose, and its removal is seen as a positive development in the taxation of carbon emissions.
- https://commission.europa.eu/news/new-action-plan-save-eu260-billion-annually-energy-2040-2025-02-26_en – The European Commission outlines an action plan aimed at saving €260 billion annually on energy by 2040. The plan includes measures to lower energy costs for citizens, businesses, and industries across the EU, with a focus on reducing electricity prices and enhancing the resilience of the energy system. These efforts are part of the EU’s broader strategy to shield consumers and industries from volatile energy costs while achieving decarbonisation objectives.
- https://hansard.parliament.uk/commons/2026-04-16/debates/26041624000009/CarbonPriceSupport – In a statement to the House of Commons, Exchequer Secretary to the Treasury Dan Tomlinson confirms the UK government’s decision to remove the Carbon Price Support (CPS) from April 2028. CPS, introduced in 2013, was designed to strengthen the carbon price for electricity generation above the Emissions Trading Scheme (ETS). The government acknowledges that CPS has fulfilled its purpose, and its removal is part of simplifying the tax and carbon pricing system.
- https://www.ecb.europa.eu/press/economic-bulletin/focus/2026/html/ecb.ebbox202601_02~a552b71378.en.html – The European Central Bank (ECB) examines the drivers of electricity prices for households and energy-intensive industries, highlighting the importance of these factors for the EU’s decarbonisation objectives. The ECB notes that despite a high share of renewables in energy generation, electricity prices have remained elevated due to spikes in fossil fuel prices, particularly gas. The ECB discusses the EU’s Clean Industrial Deal, launched in February 2025, aiming to increase the share of electricity in the EU’s gross final energy consumption from 23% in 2024 to 32% by 2030.
- https://uk.rwe.com/press-and-news/uk-statements-and-opinion/rwe-responds-to-government-announcement-that-it-will-remove-carbon-price-support/ – RWE responds to the UK government’s announcement that the Carbon Price Support (CPS) will end on 1 April 2028. The company welcomes the decision, noting that the current CPS runs until that date and is reflected in forward wholesale prices. RWE also mentions the need to agree on linkage arrangements between the UK and EU Emissions Trading Schemes (ETS) to ensure a smooth transition.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
8
Notes:
The article reports on the UK government’s recent announcement to abolish the Carbon Price Support (CPS) levy from April 2028, a decision confirmed on 16 April 2026 by Exchequer Secretary to the Treasury Dan Tomlinson. ([hansard.parliament.uk](https://hansard.parliament.uk/commons/2026-04-16/debates/26041624000009/CarbonPriceSupport?utm_source=openai)) The content appears to be original and not recycled from other sources. However, the article’s publication date is not specified, making it difficult to assess its freshness accurately. The earliest known publication date of similar content is 16 April 2026. The narrative aligns with recent developments, suggesting a high degree of freshness.
Quotes check
Score:
7
Notes:
The article includes a direct quote from Dan Tomlinson: “CPS has done its job and is no longer fit for purpose.” ([hansard.parliament.uk](https://hansard.parliament.uk/commons/2026-04-16/debates/26041624000009/CarbonPriceSupport?utm_source=openai)) A search for this quote reveals it was first used in the Hansard record on 16 April 2026. No earlier instances of this exact quote were found, indicating it is not recycled from previous sources. However, the absence of additional independent sources quoting this statement raises concerns about the quote’s verification. The lack of corroboration from other reputable outlets suggests a need for caution.
Source reliability
Score:
6
Notes:
The article originates from ESG News, a niche publication focusing on environmental, social, and governance topics. While it may be reputable within its niche, its limited reach and potential lack of editorial oversight compared to major news organisations like the BBC or Reuters raise questions about its reliability. The article does not provide clear citations or links to primary sources, which diminishes its credibility.
Plausibility check
Score:
8
Notes:
The claims made in the article are plausible and align with known facts. The UK government has indeed announced the removal of the CPS levy from April 2028, as confirmed by Dan Tomlinson in the House of Commons on 16 April 2026. ([hansard.parliament.uk](https://hansard.parliament.uk/commons/2026-04-16/debates/26041624000009/CarbonPriceSupport?utm_source=openai)) The article’s narrative is consistent with this announcement. However, the lack of supporting details from other reputable outlets and the absence of specific factual anchors (e.g., names, institutions, dates) in the article raise concerns about its completeness and depth. The tone and language used are consistent with typical reporting on such policy changes.
Overall assessment
Verdict (FAIL, OPEN, PASS): FAIL
Confidence (LOW, MEDIUM, HIGH): MEDIUM
Summary:
The article presents information about the UK government’s decision to abolish the Carbon Price Support levy from April 2028. While the claims are plausible and align with known facts, the article’s reliance on a single, niche source without corroboration from other reputable outlets raises concerns about its reliability and completeness. The lack of supporting details and specific factual anchors further diminishes its credibility. Given these issues, the article does not meet the necessary standards for publication.