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T&E: UK misses out on £2bn a year by not taxing shipping pollution

by The Editorial Team
February 6, 2023
in Emissions
uk tax shipping pollution

Credit: T&E

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UK could benefit from an additional £1.8 billion a year if it were to tax shipping emissions, a new Transport & Environment (T&E) analysis shows.

New analysis by Transport & Environment (T&E) shows that in 2021, carbon dioxide (CO2) emissions from UK shipping were 22 million tonnes (Mt).

If included in the UK Emissions Trading Scheme (ETS), these emissions would generate around £1.76bn for the Exchequer. This amount, annually, would cover the government’s own estimated ~£800m/yr cost of cleaning up the domestic shipping sector’s emissions twice over.

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Sadly though, this is not yet the plan despite the recommendations of the UK Climate Change Committee

said T&E,explaining that if the government implements its proposals to expand the UK Emissions Trading Scheme (UK ETS) to shipping, only ~10% of those 22Mt would be included in the ETS, generating just ~£170m/yr.

At present levels of emissions, the government would be walking away from £1.6bn/yr and leaving ~90% of UK shipping emissions unregulated

According to the NGO, “there are serious problems with how the government calculates UK shipping emissions, how it assigns responsibility for them and how it plans to regulate and, ultimately, abate them.”

To begin addressing these issues, the government must first ensure that the UK shipping emissions inventory is accurate and switch to an activity-based measure based on UK Monitoring, Reporting and Verification (MRV) data for all its shipping emissionsIt should then expand the scope of the ETS to include all vessels above 400 gross tonnage (GT) and include 50% of emissions from UK international voyages

T&E suggests.

In the meantime, the UK launched a multi-million-pound Zero Emission Vessels and Infrastructure (ZEVI) competition to help decarbonise its maritime sector.

Successful projects must show they could use this money to work with major UK ports and operators to launch a zero-emission vessel by 2025 at the latest.

Examples of such technology include battery electric vessels, shoreside electrical power, ships running on low carbon fuels like hydrogen or ammonia, and wind-assisted ferries.

explore more at t&e’s analysis

T&E: UK misses out on £2bn a year by not taxing shipping pollutionT&E: UK misses out on £2bn a year by not taxing shipping pollution
T&E: UK misses out on £2bn a year by not taxing shipping pollutionT&E: UK misses out on £2bn a year by not taxing shipping pollution
Tags: regulatory update cmreportsT&EUK
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