Brits brace for another rise in household energy bills as Sir Keir Starmer 'plans to join EU net zero deal'
17 April 2025, 09:20
Millions of households could see their energy bills rise next month as Sir Keir Starmer plans to join the European Union's net zero scheme.
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In order to "strengthen ties with Europe", the Prime Minister is looking to use a summit in May to align the UK and EU emissions trading schemes, it is understood.
The proposals will see the UK link its carbon credits scheme to Brussels’ system, a move which Conservative MP Nick Timothy believes will cost British households an extra £112 a year, according to the Telegraph.
This would be due to the increased cost of producing electricity from gas-fired power plants, which are the UK’s second-largest source of power.
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And making goods and electricity from these plants more expensive would place more financial pressure on British industry and household bills.
Gas is still one of the country's largest sources of power, accounting for 26 per cent of the energy mix last year.
Emissions trading schemes force carbon-emitting companies to buy credits for every tonne of greenhouse gas that they emit, adding to the cost of production and limiting the carbon footprint.
The government and EU have use these schemes to raise money for net zero projects.
Britain's carbon credits have been significantly cheaper that those in Europe since Brexit, after the UK launched it's own ETS which has a higher cap on the overall quantity of emissions.
As a result, carbon-intensive industries have produced goods, including fertiliser and steel, at a lower cost.
But ministers are now planning to rip this agreement up and have UK companies pay the same taxes as European firms, when they propose to join the Brussels' scheme at the UK-EU summit on May 19.
This would allow British exporters to avoid carbon import taxes imposed by the EU, but could result in a 50 per cent rise in the cost of credits.
Even if the deal is not completed in time for the London summit, sources told the paper that leaders would announce their intentions to link the systems whilst officials continued to carry out negotiations.
Lord Hunt, the Cabinet Office minister, said last month that the government was “actively considering the case” for linking to the EU scheme.
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But the Tories argue that the UK’s ambition of reaching net zero by 2050 is no longer realistic and could harm growth, with Mr Timothy describing the carbon credits plan as “mindless Milibandism”.
"Analysis shows that we could be heading towards an extra £112 on the cost of living because of European alignment," the MP said.
"So long as policy races ahead of technology, this means higher energy bills, fewer jobs and weaker growth.
“If the government signs up for the EU’s cap and trade scheme, then we will lose control and allow carbon prices to hit eye-watering levels. This is going back on what was promised to voters during the election.”
A government spokesman said: “We do not recognise these figures. We are resetting our relationship with the EU to improve trade and investment and promote climate, energy, and economic security.
“Ahead of the UK-EU Summit on May 19, the government is actively considering the case for linking the UK ETS to the EU ETS, but it will be important that any prospective agreement works for the UK.”
