The Carbon Reduction Commitment, announced in the Energy White Paper in May, is a mandatory cap and trade scheme that will cap emissions from up to 5,000 large business and public sector organisations.
The scheme is expected to include a further 14 million tonnes of carbon each year within a cap and trade scheme..
Environment minister Ian Pearson said: "We are committed to ambitious targets to reduce the UK's CO2 emissions and this will require contributions from all sectors of the economy and from across all parts of the UK.”
All allowances will be auctioned, with the revenue from the auction recycled to participants based on their performance and the government is consulting on the detailed implementation of the policy.
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