UK Expands Emissions Trading Scheme to Maritime Sector

The UK is expanding its Emissions Trading Scheme (ETS) to include maritime emissions, marking a transformative step for the shipping industry’s environmental accountability.

The expansion will require vessels operating domestic routes to secure allowances for each tonne of carbon emissions, effectively incorporating environmental costs into maritime fuel pricing. This development comes as part of the UK’s broader strategy to achieve its net zero targets while maintaining economic growth.

“Today’s publications are about engaging and providing clarity for business, and incentivising them to lower emissions as we transition to a greener future,” stated UK ETS Authority ministers in a joint announcement.

The proposed changes, which were first announced in July, would come into effect from 2026.

The initiative also introduces innovative provisions for carbon capture and storage, particularly beneficial for energy-intensive industries. The scheme will recognize non-pipeline transport methods, including shipping, road, and rail, for moving captured carbon to geological storage facilities.

This expansion builds upon the success of the UK ETS, which has been operational since 2021, already covering aviation, power, and industrial sectors. The scheme employs a market-based approach, creating a carbon price that incentivizes businesses to reduce their environmental impact.

The announcement coincides with the UK Government’s commitment to establish its first carbon capture sites, projected to generate 4,000 jobs and attract £8 billion in private investment across Northern England.

For maritime operators, the scheme includes carefully considered provisions, with specific attention to Scottish island communities and the interaction with regional and international emissions pricing mechanisms.

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