Britain to scrap carbon tax on electricity generation

Britain is set to abolish the carbon tax on electricity generation, per Reuters. The levy currently sits on top of the UK Emissions Trading Scheme and raises the short-run marginal cost of thermal plant. Its removal would reduce the floor under GB spot prices, particularly during gas-setting hours.

The driver is household affordability. UK electricity bills have remained elevated, and the government is under pressure to cut system costs that flow through to retail tariffs. Scrapping the generation carbon tax is one of the more direct levers available without touching network charges or supplier margins.

The Reuters report does not name a specific figure for the levy rate to be removed, nor confirm a parliamentary timeline. Traders should treat the signal as directional rather than priced-in until legislation is tabled.