Draft Greenhouse Gas Emissions Trading Scheme (Amendment) (Extension to Maritime Activities) Order 2026

Andrew Bowie Excerpts

Tuesday 3rd February 2026 General Committees

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

It is an absolute pleasure to serve under your chairmanship this morning, Sir Jeremy. The draft order affects the implementation of the UK emissions trading scheme, which replaced our participation in the EU ETS from 2021. As the Minister set out, the scheme was established under the Climate Change Act 2008 by the Greenhouse Gas Emissions Trading Scheme Order 2020.

In the draft order, the Department seeks to expand the scope of the UK ETS in line with the Secretary of State’s net zero agenda. We saw just last week an instrument brought with the effect of reducing the free allowances under the scheme, increasing the carbon tax on industry from 2027 onward. The increasing cost on industry per tonne of greenhouse gas emitted is a burden that weighs on the UK’s industrial competitiveness. Food manufacturers, oil refineries, power stations and more are all subject to this framework. As the levy on emissions increases, naturally prices paid by end consumers are also driven up. That is why we have said that when we are re-elected to Government in three years’ time, we will repeal the ETS framework and begin to undo the great damage to Britain’s industrial base being done by the actions of this Government. We only hope that it will not be too late.

The draft order requires maritime operators to participate in the scheme, enacting a requirement on ship operators to produce an emissions monitoring plan. The nominal purpose of this extension is to encourage decarbonisation in the maritime sector, which is a laudable aim—not that it will have any impact on global maritime emissions, given the fact that the USA, China, India and others have no plans to curb their emissions in the maritime sector. As a result, this mechanism will actually function purely as a carbon tax. To pretend otherwise would be this Government at their absolute abject worst. This is not a mechanism to decarbonise; it is a pernicious tax being levied on one of our most successful industries.

Access to alternative fuels is not sufficient to decarbonise at the level required by the scheme. The infrastructure that the UK maritime industry requires to transition to low carbon simply does not exist at the scale that will be required. Worse, the industry is expected to comply in three months’ time, while still awaiting guidance to be published on how they can implement it. Even for this Government, that is either incompetence of the highest order, a deliberate attempt to squeeze a hard-pressed industry even more to make up for the shortfall in Treasury receipts as businesses and individuals up sticks and get out of the United Kingdom.

The Department’s own impact assessment quotes an £85 million cost to British business as a result of this mechanism and we have not even turned to the burden that this mechanism is going to place on operators. This emissions monitoring plan represents a ridiculously onerous administrative burden on maritime businesses. Article 18 of the order details the facts to be logged on each voyage for ships completing fewer than 300 voyages per year, including:

“(a) port of departure;

(b) date and hour of departure;

(c) port of arrival;

(d) date and hour of arrival;

(e) total amount of each type of fuel consumed;

(f) emission factor for each type of fuel consumed;

(g) amount of each greenhouse gas emitted.”

The burden then falls on the maritime operator to produce a risk assessment to identify potential sources of error in data flows. I recite that content only to illustrate the extent of the burden that this regulation imposes on the sector.

This instrument extends the ETS burden to the UK shipping industry to the tune of £175 million in administrative costs alone. That is utterly absurd. This is without doubt one of the worst pieces of legislation I have seen come before us in three Parliaments and nine years on Government Front and Back Benches and now in opposition. For every £1 spent on decarbonisation as a result of the framework, £8 will be spent on bureaucracy. That is insane. That does not support businesses or growth. The only thing growing here is the burden of red tape—the Government’s favourite colour—on UK industry.

I take this opportunity to put on record my support for the specific exemptions made for fishing vessels and ferry services providing essential connectivity for Scottish islands. It is vital that they are exempt from the burden of the restrictions, albeit it is to be for only one year. One questions why the Isles of Wight and Man and the Scilly Isles are not afforded the same level of concern. 1 would argue, and I know my hon. Friend the Member for Isle of Wight East will argue, that the connections to those islands are just as vital as connections to the Scottish isles.

Believe it or not, Sir Jeremy, it gets worse. Although the extension is a major blow to the maritime industry and UK shipping competitiveness overall, it is another death knell for the oil and gas industry, which is yet again being totally shafted by this Government. This instrument includes in its definition of offshore vessels those that support the oil and gas industry, which are not protected by the 5,000 GT threshold. The Government estimate that more than 145 oil and gas support vessels will be impacted by this instrument, but we know they do not care, because most of the vessels sail out of the port of Aberdeen, which is already suffering job losses as a direct result of the Government’s policies on oil and gas. Aberdeen city and shire have no Labour MPs or MSPs, so we know the party does not care about the fate of that city, its industry, economy or people. Those of us who live there feel that every day.

What impact does the Minister think the extension will have on the north-east of Scotland and the UK oil and gas sector—a sector already suffering blow after blow from the Labour Government? What impact will that have on energy security? May I also ask the Minister what assessment he has made of the risk of carbon leakage in the maritime sector and whether he believes the safeguards under this instrument are sufficient? We do not simply oppose this instrument; we will vote against it. We oppose the UK ETS and carbon taxes that are crippling UK manufacturing and businesses and deindustrialising Britain at a criminal rate. On behalf of all those who this Government are harming by their reckless actions, we ultimately oppose this Government.

[Several hon. Members rose—]

--- Later in debate ---

[Andrew Bowie]

No votes.

[Jim Allister]

No votes—probably. That is probably the same answer in respect of the whole of Northern Ireland. When the Minister gets a chance to listen, I say to him: I do not accept lesser service for my constituents than he obtains for his or any other Member of this House. If we are a United Kingdom, then we need to be a United Kingdom of equals, not with those who are taxed while others are not, and not with consumers who pay more while others do not—but that is the product of what this Government are doing to Northern Ireland and the Rathlin islanders as well.

It is not enough for the impact assessment to recognise that consumers in Northern Ireland are more exposed—but if they are, what will the Government do about it? The impact assessment recognises that Northern Ireland consumers are more exposed, but the Government turn their face away and will not do anything about it. That is neither tenable nor tolerable.

Furthermore, the Government say, “You must do this in six months.” What planet of unreality are they living on? They like to ape so much of what the EU does, but even the EU with its ETS has a three-year transition. Indeed, the EU is also reviewing what it is doing. Impossibly, however, we are saying to the maritime sector in the United Kingdom, “You have five months to get this sorted out, and then your consumers start to pay for our indulgence and for our self-congratulation that we are dealing with carbon emissions.” That is not an acceptable way to go. Because there is no investment and no transition, it is inescapable that this is but a tax, a carbon tax on my constituents, on the people of Northern Ireland, on the people of Rathlin island and on all those who have not been given the equality of treatment of exemption that has been accorded to others.

[Chris McDonald]

I thank all right hon. and hon. Members for their contributions to the debate. I hope to be able to respond to them.

We heard, from the shadow Minister, the hon. Member for West Aberdeenshire and Kincardine, the Opposition’s clear objections to the emissions trading scheme. We also heard them last week, in a statutory instrument debate about the emissions trading scheme and the future introduction of the carbon border adjustment mechanism. This is clearly a significant change in policy from the Opposition, as they line themselves up with the climate deniers in the hope that they might scrounge some votes back from Reform, but—[Interruption.] It absolutely is a desperate measure.

The shadow Minister talks about protection for industry. We discussed that extensively in this Committee Room last week. Of course, the carbon border adjustment mechanism is precisely there to protect British industry from unfair competition from imports from more polluting industries in countries without such regulations. The Opposition’s objections to the carbon border adjustment mechanism, which we heard in this room last week, actually put British industry on the block. I do wonder whether they have fully thought through their policy, because when the statutory instrument went to the Lords, their spokesperson was not clear about whether the Opposition opposed the carbon border adjustment mechanism. Perhaps the shadow Minister might want to say whether that is Opposition policy.

[Andrew Bowie]

indicated dissent.

[Chris McDonald]

No, the shadow Minister does not. Well, perhaps he needs to think about it a bit longer.

The shadow Minister talked about the administrative burden placed on maritime companies, which is of course something of which the Government are very conscious. He mentioned some of the information that would need to be recorded, such as port of departure, fuel use and so on. I do not know when he last spoke to somebody who actually operates a vessel, but a lot of this information is routinely recorded. Perhaps his ignorance of maritime operations is second only to his ignorance of the United Kingdom.

[Andrew Bowie]

As somebody who served in the Royal Navy for four years after I left school, I have full awareness of maritime operations and of the importance of our United Kingdom. I was talking about the gross unfairness of this legislation and the impact it is having on some communities around this kingdom, whether on the Isle of Wight or in Northern Ireland. The Minister has the audacity to claim that CBAM is protecting British industry, when his Government’s policies are doing more to undermine British industry than any policy of any Government in recent history. The deindustrialisation we are seeing in this country is something of which his party, which still laughably calls itself the Labour party, should be utterly ashamed. I ask him to withdraw his remark about the ignorance of maritime affairs.

[Chris McDonald]

I commend the hon. Gentleman for his service in the Royal Navy, and I am happy to withdraw that remark. Perhaps there was an oversight on his part in relation to that particular issue. I absolutely do withdraw that remark.

On the shadow Minister’s comment about the United Kingdom, the Isle of Man is a Crown dependency, as I am sure he knows, so it is not covered by the scheme. He mentioned the Isles of Scilly. The vessels to the Isles of Scilly are not covered by the scheme either, because they are below 5,000 gross tonnage.

The shadow Minister also mentioned the Isle of Wight, and I want to respond to the comments from the hon. Member for Isle of Wight East. I looked very carefully at the issues around the Isle of Wight before we tabled this statutory instrument, because those were a significant concern for me as well, and I am happy to offer some additional information now. I am grateful to my colleague my hon. Friend the Member for Isle of Wight West (Mr Quigley), who requested a meeting with me before this statutory instrument was laid. I was happy to have that conversation with him, and I offer that courtesy to the hon. Member for Isle of Wight East as well, if he would like to have such a meeting after this debate.

Perhaps I can in some way put the hon. Gentleman’s mind at rest. First, regarding the situation on the Isle of Wight versus the ferry operators in Scotland, one of the key considerations for us was that the population on the islands in Scotland is considerably lower than that of the Isle of Wight. There is also no competition generally between the ferry operators, but there are there are a number of routes operating to the Isle of Wight, as the hon. Gentleman will know very well. The scheme will affect only two vessels, from one operator, on the Isle of Wight: one is a diesel vessel and one is a hybrid vessel. Clearly, the impact of the scheme will be felt more on the diesel vessel than the hybrid vessel, and that is because of the 5,000 gross tonnage limit. I am sure that I am not telling the hon. Gentleman anything that he does not know, but I want to be clear that we have thought very carefully about this.

The hon. Gentleman and a number of Members mentioned the opportunity for decarbonisation. In my opening remarks, I mentioned a number of ways that that could be done, including more fuel-efficient operating practices and various other things. We have set aside £448 million of Government funding to support that, which was announced previously. If the hon. Gentleman would like to meet with me to go through more of that in detail and represent the views of his constituents, I would be happy to do that.