The UK shipping industry has stepped up its criticism of government plans to extend the UK Emissions Trading Scheme (UK ETS) to domestic maritime from 1 July 2026, warning that the policy risks harming UK competitiveness, increasing costs for island communities, and slowing progress towards net zero.
The Draft Greenhouse Gas Emissions Trading Scheme (Amendment) (Extension to Maritime Activities) Order 2026, to extend the UK ETS to domestic maritime, was passed by the Commons on February 11, following “limited parliamentary scrutiny” and “despite broad-reaching concerns” as the UK Chamber of Shipping said in its statement.
The scope of the UK ETS is being expanded to maritime activities as part of the government’s strategy of decarbonising all sectors of the UK economy to meet the net zero target by 2050.
The statutory instrument amends the legislation that gives effect to the UK ETS. It expands the scheme to cover carbon dioxide, methane and nitrous oxide from domestic voyages and in-port activities in the UK.
Effective from 1 July 2026, maritime operators are required to participate in the scheme and allowed to bid at auction for UK allowances.
This amendment will formally extend the UK ETS to cover greenhouse gas emissions from maritime activities, which includes vessels of 5,000 gross tonnage and above.
The scheme is run by the UK ETS Authority, a joint body involving the UK government and the devolved governments.
The draft order requires maritime operators to participate in the scheme, enacting a requirement on ship operators to produce an emissions monitoring plan.
A spokesperson for the UK Chamber of Shipping said: “The sector supports the UK’s climate goals, but cannot deliver meaningful emissions reduction without the necessary fuels, infrastructure, and clear guidance in place – and unreasonable timeframes to implement flawed policy.
“Premature implementation risks higher costs for passengers and freight, with limited environmental gain. However, Government is pressing ahead, despite concerns from several quarters, leaving industry in an untenable position.”
Particular concern centres on the tight timelines as the regulations published on January 13 come into force just six months later, requiring operators to finalise emissions monitoring plans, hire verifiers, upgrade systems and forecast financial impacts without full guidance or clarity from government.
The Chamber now urges the government to publish full technical guidance, revise the implementation timeline, protect the ferry‑reliant communities, recycle the ETS revenues into maritime decarbonisation and ensure alignment with the EU and international frameworks.
While there are clear precedents such as protections for Scottish islands under the EU ETS, equivalent safeguards have not been committed for the UK.
The Chamber – citing Industry representatives – is calling for ringfencing maritime ETS revenues for shore power, grid upgrades, retrofits and clean fuels.
It has also urged alignment with the EU ETS rules to avoid double‑charging and carbon leakage, targeted protections for ferry‑dependent and island communities, as well as a phased or “monitor‑only” period until operators and ports have the systems required for compliance.
For now, the industry says it stands ready to work with ministers to develop an approach that supports real emissions reduction while protecting essential UK connectivity.
