The United Kingdom will abolish its carbon tax on electricity generation from April 2028, the government announced on Thursday, as part of efforts to ease rising energy costs.
The tax—known as the Carbon Price Support (CPS)—was introduced in 2013 to discourage fossil fuel use by making carbon-intensive power generation, particularly coal, more expensive. It has been frozen at £18 per metric ton of carbon dioxide under last year’s budget.
Treasury minister Dan Tomlinson said the policy had achieved its original goal and was no longer necessary.
“CPS has done its job and is no longer fit for purpose. Coal has been driven off the grid,” he said in a statement to parliament.
Britain closed its last coal-fired power plant in 2024 and has since accelerated investment in renewable energy as part of its plan to largely decarbonise the electricity sector by 2030.
The government said its broader clean energy strategy has already reduced reliance on fossil fuels, making additional carbon pricing measures less critical.
The CPS is currently applied on top of costs under the UK’s emissions trading system, where carbon prices are significantly higher. Officials say the removal of the tax reflects the changing energy mix and aims to support affordability while maintaining progress toward climate targets.