UK ETS Authority outlines intention to include the maritime sector in scheme to cut carbon emissions and support economic growth witth the proposed changes coming into effect from 2026.
The UK ETS Authority is consulting on proposals to expand the scheme to include emissions from the maritime sector and recognise non-pipeline transport methods, such as shipping, road or rail, for moving captured carbon into geological storage.
The two consultations cover:
- How the UK ETS will expand to include maritime emissions, outlining the definition of a domestic voyage under the scheme, details of the threshold for ships, proposed exemptions, including to Scottish island communities, and the greenhouse gases to be covered. It also considers how the expansion could interact with regional and international emissions pricing.
- How the UK ETS will recognise non-pipeline transport of CO2 using shipping, road or rail to permanent geological storage. This will mean emitters storing CO2 in this way would not have to pay a carbon price for CO2 they successfully capture.
The purpose of the consultation is to provide more detail and consult on the implementation of how maritime will be incorporated in the scheme from 2026 and to propose and consult on potential future expansion of the UK ETS to additional maritime emissions. In particular, it seeks views on:
- The scope of the scheme (definition of a domestic voyage, thresholds for inclusion, the inclusion of methane and nitrous oxide emissions and exemptions from the scheme).
- Details around how to adjust the UK ETS cap to include emissions from the maritime sector .
- Participating in the scheme (regulatory regime and operator requirements, monitoring, reporting and verification, point of obligation and guidance) .
- Impacts of the scheme (decarbonisation impacts, potential distributional impacts and carbon leakage risk; equality considerations).
- Potential future expansion of the UK ETS to additional maritime emissions, with a future review of the threshold and coverage of international routes.
Launched in 2021, the UK ETS helps the UK to decarbonise across aviation, power and industry by setting a limit on emissions, with allowances that can be traded, creating a carbon price that incentivises businesses to reduce their emissions. By expanding the scheme to include the maritime sector, businesses with ships operating domestic voyages would need to obtain allowances for every tonne of carbon they emit. This will ensure that the price of fuels used by the sector better reflects their environmental impacts.
To remind, recently, environmental campaigners led by Transport & Environment (T&E), were urging the UK government to integrate the country’s share of maritime greenhouse gas emissions into the United Kingdom Emissions Trading Scheme (UK ETS).
