UK Adds Maritime Transport to Emissions Trading Scheme

The UK Emissions Trading Scheme (ETS) Authority has recently unveiled a series of reforms aimed at strengthening emission limits for industrial, power, and aviation sectors starting from 2024. These reforms will further extend the emissions cap to include additional UK sectors such as domestic maritime transport and waste.

This marks the first time that domestic maritime transport, waste incineration, and energy from waste sectors will be incorporated into the scheme. It aligns with the UK’s commitment to include high-emitting sectors in the UK ETS and will incentivize companies in these industries to reduce their emissions and invest in cleaner alternatives.

The UK ETS will include domestic maritime transport from 2026 and waste incineration and waste from energy sectors from 2028. The timing is meant to give operators time to prepare for the changes. The expansion will only apply to large maritime vessels with a gross tonnage of 5,000 and above.

The UK ETS was introduced in 2021 as a replacement for the country’s participation in the EU ETS. The scheme operates by encouraging decarbonization through the buying and selling of emissions allowances. Companies must obtain these allowances for each tonne of emissions they produce annually. Businesses that successfully reduce their emissions can sell any unused allowances to other firms.

In a joint statement, UK ETS Authority Ministers emphasized the importance of accelerating the transition away from costly fossil fuels and towards greener, more secure energy sources.

“The decisions taken here will not only put us on the path to net zero, but will also support crucial industries on their path to long term sustainability,” the statement said.

The UK Chamber of Shipping has welcomed the addition of domestic maritime transport to the ETS, acknowledging it as a significant step toward achieving net-zero emissions in the UK shipping sector. However, the chamber highlights that international agreements still remain the most effective means of driving lasting change across the entire industry.

“It is important that as the details of the scheme become clear it helps, rather than hinders, the drive towards net zero. This means ETS funds raised from domestic shipping must be used to aid the transition to net zero for the sector. This should include supporting the development of zero-emission vessels, fuels and technology and associated port infrastructure,” the chamber said.

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