Question to the Department for Transport:

To ask the Secretary of State for Transport, what assessment she has made of the potential implications for her policies of the decision not to temporarily exempt the Isle of Wight from the maritime expansion of the Emissions Trading Scheme, in line with Scottish islands, due to the lack of available grid capacity for domestic ferry operators to decarbonise their lifeline operations through electric ferries.

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 ensures that emissions reductions are delivered at the lowest overall economic cost and market distortions are minimised.

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 continue to work with Ofgem, the independent energy regulator, in its work to incentivise network companies to invest strategically ahead of need, ensuring that future grid capacity planning reflects the emerging demands from electrifying sectors, including the Isle of Wight ferry market.

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