Glossary · UK
What is Carbon Price Support (CPS)?
A UK top-up carbon tax on fossil fuels used to generate electricity, alongside the EU/UK Emissions Trading Scheme.
Full Definition
Carbon Price Support (CPS) is a UK tax, charged as an additional rate within the Climate Change Levy framework, on fossil fuels used to generate electricity, designed to set an effective minimum carbon price for power generation on top of whatever price is set by the UK Emissions Trading Scheme. It was introduced to give investors greater certainty about the future cost of carbon in electricity generation and has been a factor, alongside the ETS, in accelerating the UK's shift away from coal-fired power.
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