UK Charts a Clear Course for Regulated Carbon Removals by 2029

In a landmark move that could redefine the future of emissions trading, the UK government has announced plans to integrate carbon removals into its compliance carbon market by 2029. This decision positions the UK as a global frontrunner in recognising carbon dioxide removal (CDR) as a serious component of environmental support, not just voluntary action.

A British man holding biochar, standing with a dense UK forest behind him. AI generated picture.

Under the UK Emissions Trading Scheme (ETS), which currently covers about 111 million tonnes of emissions from sectors like power and aviation, new rules will soon allow companies to purchase carbon removal credits—if those removals meet stringent new standards.

With legislation due by 2028 and implementation slated for the following year, the shift signals the start of a market-based system that rewards projects focused on long-term, verifiable carbon sequestration. That means solutions like direct air capture (DAC), enhanced weathering, and biochar could soon tap into an $800+ billion global compliance market. Even a 1% share in the UK ETS could unlock over $50 million annually for verified removals.

Eligibility will be limited to carbon removals that take place within the UK, are certified only after permanent storage is confirmed, and demonstrate a minimum 200-year carbon lock-in. This effectively raises the bar on quality and excludes more reversible solutions, such as reforestation, that can’t guarantee permanence.

The UK is also evaluating the introduction of a dual-credit system to distinguish between avoided emissions and actual removals. This could bring about more transparent pricing and clear differentiation in how carbon credits are treated under regulation.

To support market participation, removal credits will be sold through auctions rather than informal, private deals. And while new credits will be introduced, the total cap on emissions won’t be increased, ensuring that removals complement rather than dilute green goals.

Startups and innovators in the UK’s carbon removal space stand to benefit significantly. Companies like UNDO, which spreads basalt to accelerate natural weathering, and Mission Zero Technologies, building modular DAC units, now have a clearer path to monetise their solutions in a fully regulated environment.

As countries worldwide face mounting pressure to reach net-zero, the UK’s approach could set the precedent for integrating removals into mainstream environmental policy, bringing credibility, capital, and scale to a rapidly evolving sector.