The UK Emissions Trading Scheme (ETS) paid out nearly £150 million in compensation to energy-intensive industries in a single year. The paper sector received the largest share at £50.3 million, followed by iron and steel at £42 million, chemicals at £35.7 million, and non-ferrous metals at £6.3 million. The scheme is designed to offset higher electricity costs caused by carbon pricing, helping British businesses stay competitive against rivals in countries without similar carbon taxes. Critics, including Shadow Energy Secretary Andrew Bowie, call the arrangement 'total madness' because taxpayers fund handouts to industries that are also hit by the carbon levy. Supporters argue the compensation prevents carbon leakage and keeps strategic industries in the UK. The debate highlights the ongoing tension between pricing emissions and protecting domestic manufacturers, a challenge that will shape future climate policy design.
