The UK has launched a consultation on possible changes to its emissions trading system, including adding the maritime sector and tightening caps set under the scheme to help it meet its net zero emissions target.
Shipping has so far not been included in Britain’s or the EU scheme, and the European Union is also seeking to charge shipping for its emissions in the face of resistance from some in the industry.
Namely, Reuters cites information from a consultation document from the Department for Business, Energy and Industrial Strategy, that notes:
We propose to include domestic maritime within the UK emissions trading scheme by the mid-2020s and will aim to provide more details on timing for implementation later this year
Under the ETS, the government will set a gradually decreasing cap on the amount of emissions that a sector, or group of sectors, can produce. It also creates carbon permits for those emissions and companies must buy one for each tonne of carbon dioxide (CO2) they emit.
What is more, the consultation mentioned that it will seek to adjust the cap in the ETS from 2024, in order to align it with the country’s target of reaching net zero emissions by 2050.
Now, many participants of the scheme have called on the government to link it to the European scheme, which would allow permits to be traded between them to create one shared carbon price and boost liquidity.
We are open to the possibility of linking the UK ETS internationally and will continue to work collaboratively with other jurisdictions
the document said.
In the meantime, amendments to the draft EU Maritime Emissions Trading System (ETS) proposal could impact the apportionment of ETS costs and liabilities in the maritime sector, argue WFW London Partner Nick Walker and Senior Associate Valentina Keys.
On 14 January 2022 the European Parliament’s Rapporteur, MEP Peter Liese, published his draft report on a proposal to revise the Emissions Trading System (ETS) Directive which forms part of the ‘Fit for 55’ package of climate and energy reforms published on 14 July 2021.
The draft report includes a number of ambitious amendments to emissions trading for the maritime sector – the Maritime ETS – which, if agreed, will put more pressure on the maritime industry to switch to cleaner fuels sooner than originally planned. Further amendments are expected to be submitted in response to ongoing feedback from businesses in the coming weeks.
