Environmental campaigners, led by Transport & Environment (T&E), are urging the UK government to integrate the country’s share of maritime greenhouse gas emissions into the United Kingdom Emissions Trading Scheme (UK ETS).
T&E has been actively advocating for the inclusion of shipping emissions in carbon pricing systems as a way to decarbonize the sector. According to their estimates, such a move could generate over £1 billion annually, which would be reinvested into developing zero-emission marine fuels, particularly hydrogen-based alternatives.
T&E’s proposal calls for the inclusion of both domestic shipping emissions and 50% of international shipping emissions for vessels over 400 gross tonnage. This would align maritime emissions with other transport sectors, such as aviation and road transport, which are already subject to emissions duties and pricing schemes.
The proposal aligns with the European Union’s decision to incorporate shipping into its Emissions Trading Scheme (EU ETS) as of January 2024. This alignment would help the UK avoid “carbon leakage” — a situation where ships divert to EU ports to avoid paying higher emission fees. Moreover, shipping is responsible for nearly one-fifth of UK transport greenhouse gas emissions, and addressing these emissions is essential for meeting the UK’s broader net-zero targets.
Campaigners argue that with the right policies and investments, the UK could produce nearly 3 million tonnes of hydrogen-based marine fuels by 2030. This would require significant investment, estimated at £28 billion between 2025 and 2035. Allocating ETS revenues to decarbonizing maritime transport could help the UK become a leader in zero-emission shipping technology and infrastructure.