Other carbon markets
Carbon markets outside the EU: the UK ETS and UKAs, emissions trading schemes worldwide, carbon credits and the voluntary market.
Our articles on the UK ETS, UKAs, carbon credits and global markets
What is a UKA? A Complete Guide to UK Carbon Allowances
UKAs (United Kingdom Allowances) are the carbon allowances of the UK Emissions Trading Scheme (UK ETS). Each UKA represents the right to emit one tonne of CO₂ and works on a Cap-and-Trade principle: a government-set ceiling that shrinks every year. Today, UKAs trade at roughly a 20% discount to European allowances (EUAs), making them one of the most-watched assets in the carbon market, what carbon desks call a convergence trade, and what we at Homaio call the Convergence Play.
July 7, 2026
What Performance Can You Expect from UKAs? The 3 Drivers of UK Carbon Allowance Returns
UKA performance rests on three clear drivers: catch-up of the spread with European allowances (~+40% mechanical upside), engineered scarcity of an asset whose supply shrinks every year, and the 2050 Net Zero trajectory that anchors durable demand. Reference analysts (BloombergNEF, ICIS, Veyt, Redshaw) converge on forecasts above £100 by the end of the decade. Carbon desks call this kind of setup a convergence trade. At Homaio, we call it the Convergence Play: a macro-political bet that is both readable and measurable.
July 6, 2026
The UKA-EUA Convergence Play: Anatomy of a Catch-Up in Motion
May 2025, London summit: Keir Starmer and Ursula von der Leyen formally state their intention to link the UK ETS to the European system. A new term has been circulating among carbon analysts ever since: the Convergence Play. The mechanic is simple: UKAs trade today around 20% below EUAs, a discount that has already partially closed since May 2025. The residual mechanical upside is around +20 to +25%. Here's how it works, why it's happening now, and what the Swiss-EU precedent teaches us.
July 5, 2026
What is the Climate Impact of a UKA? One Tonne of CO₂ Pulled Off the Market, Measured and Verifiable
Holding a UKA does something simple and radical: it takes one right-to-emit tonne of CO₂ off the UK market. Not an offset, not a voluntary credit, not a tree-planting promise. A regulated allowance, accounted for by the State, that exits the system the moment a non-compliance investor holds it. It's what we call an additional climate action: measurable, verifiable, legally framed. Here's how it works, and why this impact is one of the most robust in today's climate-finance landscape.
July 4, 2026
UKAs and EUAs: Why Hold Both When You're Already Invested in European Carbon
If you're already invested in European EUAs, do you need to bother with UK UKAs? Short answer: yes. Long answer: the two markets are correlated at around 80% over time, but that correlation hides distinct dynamics (political, industrial, calendar-based) that make UKAs both linked and differentiated from EUAs. That's precisely what makes the combination interesting: an EUA core for liquidity and depth, a UKA satellite for political catch-up and the associated risk premium. Here's why.
July 3, 2026
Carbon Credits: Understanding, Analyzing, Acting
Understand carbon credits and their role in offsetting emissions. Learn the difference between credits and allowances, how they work, and key considerations for ethical purchasing. Explore the challenges and limitations of the voluntary carbon market
April 30, 2025
Do other countries have an emissions trading scheme (ETS)?
To combat climate change, more countries are adopting Emissions Trading Schemes (ETS), with 36 jurisdictions now using them. These schemes, along with carbon taxes, generated $104 billion in 2023 for environmental projects, but higher carbon prices are still needed globally to meet climate targets. The EU is pioneering carbon pricing, encouraging other nations to develop their own schemes and adapt them to local contexts to promote responsible investing.
August 12, 2024
Can carbon offsets be used in the EU ETS?
Carbon offsetting involves compensating for greenhouse gas emissions by reducing them elsewhere, with carbon offset credits representing certified emission reductions. While previously used in the EU ETS, they were removed due to ineffectiveness, but future integration is being discussed, with the ETS market being significantly larger. Carbon offset projects include renewable energy and avoided deforestation, and discussions are underway on how to invest in green finance.
June 14, 2024
What are the greenhouse gas emissions trading schemes in the EU and globally?
This article discusses greenhouse gas emissions trading schemes, focusing on the EU ETS and its success in reducing emissions. The EU's Carbon Border Adjustment Mechanism (CBAM) is incentivizing other countries to adopt their own carbon markets for responsible investing and sustainable finance. Globally, carbon markets are expanding, with several countries developing or implementing their own schemes to address climate finance and promote ethical investments.
March 22, 2024