Friday, 17th April 2026

UK Government

The Exchequer Secretary to the Treasury informed the House that Carbon Price Support (CPS) will be removed from April 2028. CPS is a tax on fossil fuels used in electricity generation, introduced in 2013 by a previous government to strengthen the carbon price for electricity generation above the price provided by the Emissions Trading Scheme (ETS). CPS has done its job and is no longer fit for purpose. Coal has been driven off the grid and the ETS has matured, with a tighter cap to drive the signal for electricity generators to decarbonise, so now is the right time to simplify the tax and carbon pricing system. With our Clean Power 2030 mission, they are already reducing our electricity system’s reliance on volatile fossil fuels and they no longer need this additional tax to provide incentives in the system to decarbonise our grid. CPS removal will also help to offset costs to all billpayers of the British Industrial Competitiveness Scheme (BICS) which will reduce electricity bills for manufacturing sectors in the Industrial Strategy. The Government will legislate for the removal of CPS in a future Finance Bill.