Question to the Department for Transport:

To ask the Secretary of State for Transport, what the evidential basis was for not exempting large islands such as the Isle of Wight from the UK Emissions Trading Scheme.

The UK Emissions Trading Scheme (ETS) is a key and effective policy lever for reducing greenhouse gas emissions across the economy and there is a high bar for any exemptions from the scheme. A uniform carbon price applied consistently, without multiple carveouts, ensures that emissions reductions are delivered at the lowest overall economic cost and market distortions are minimised. Exemptions undermine these benefits.

Ferries serving Scotland’s islands and peninsula communities are exempt because of the unique and pressing challenges they face in accessing essential goods and services. This is in addition to the legal duties to consider island populations under the Islands (Scotland) Act 2018.

The Government will evaluate any impacts of the scheme on consumers and businesses, as well as the existing exemptions, in a review of the UK ETS maritime regime in 2028.