A coalition of environmental and clean fuel organisations has urged the UK Government to bring forward the extension of the
A coalition of environmental and clean fuel organisations has urged the UK Government to bring forward the extension of the UK Emissions Trading Scheme (UK ETS) to international shipping from 2028 to 2027.
In a joint letter, the organisations argue that delaying implementation until 2028 would postpone alignment with the EU system and slow potential investment opportunities. They also point to the Common Understanding reached at the UK–EU Reset Summit, which identified the alignment of emissions trading schemes as a key step toward levelling the playing field for industry and reducing trade friction.
As explained, with the European Union Emissions Trading System (EU ETS) already covering international shipping emissions, it is both logical and necessary for the UK to move in step as soon as possible.
Furthermore, the coalition warns that waiting an additional year would delay the environmental, strategic, and economic benefits of a unified carbon pricing framework. It adds that bringing forward the extension to 2027 could generate around £574 million in additional revenue for the UK Exchequer.
This funding could be reinvested into the decarbonisation of the UK maritime sector, including projects such as expanding onshore power infrastructure at ports and accelerating the development of domestic green shipping fuels.
These investments, they argue, would not only support progress toward the UK’s net zero targets but also help drive industrial regeneration and create skilled employment in coastal communities.
This is more important than ever with the current oil crisis due to the closure of the Strait of Hormuz costing the sector billions. Investing in the sector’s decarbonisation will help to improve national and energy security by reducing vulnerability to global geopolitical price and supply shocks.
Powering shipping with renewable fuels that can be produced in the UK and rely on locally produced energy, would reduce reliance on imported fossil fuels and strengthen the UK’s long-term energy resilience.
By bringing the UK ETS extension forward by just one year, the Government can send a clear signal of its intention to maintain regulatory alignment with key trading partners, deliver measurable environmental and fiscal gains, position the UK as a frontrunner in clean shipping and promote the sector’s energy dependence.
…the organisations highlighted.
Furthermore, the International Council on Clean Transportation (ICCT), in a separate brief, further highlighted that the 2026 UK ETS scope — in-port and domestic voyages from ships ≥ 5,000 GT — covers just 2.5 Mt, or 15% of total emissions. Voyages between the United Kingdom and international ports account for 12.1 Mt—the largest share by far, but fall outside of current UK ETS coverage.
- 15% of UK-related shipping emissions are currently covered by the UK ETS. The 2026 expansion is an important first step, but the majority of emissions, which are concentrated on international routes, remain outside the scope of any ETS.
- Expansion could quadruple both coverage and revenue. Including international voyages and ships below 5,000 GT could bring total coverage to 10.3 Mt CO2e and generate £570–£710 million annually to support maritime decarbonization.
- International voyages are the biggest opportunity. Including 50% of UK–International emissions from ships of 5,000 GT or more alone could more than triple current emissions coverage and generate £290–£360 million in annual revenue.
- Broader scope reduces gaming and leakage risks. Without coverage of international voyages and smaller vessels, operators may have financial incentives to restructure routes or vessel sizes to avoid the scheme.
The UK ETS Authority should also be aware that without broader scope, operators may divert to non-covered ports or build smaller vessels to avoid the size threshold — undermining the scheme’s effectiveness.
…ICCT noted.
Content Original Link:
" target="_blank">
