Question to the Department for Transport:

To ask His Majesty's Government why they plan to introduce maritime obligations under the UK Emissions Trading Scheme (ETS) from July before pursuing linkage with the EU ETS; and what assessment they have made of the risks of implementing a standalone scheme before linkage with the EU scheme, in particular the risk of misalignment, double-charging at berth, impact on competitiveness and regulatory divergence for UK shipping operators.

As set out in the Maritime Decarbonisation Strategy, emissions pricing is an effective policy lever to reduce emissions. The Government set out its intention to include domestic maritime emissions in the UK Emissions Trading Scheme (ETS) in 2022 and confirmed expansion by 2026 in the Government response to the consultation in 2023. This was followed by a further consultation in November 2024 detailing the Government's proposed policy approach.

The Government have confirmed that we will be expanding the UK Emissions Trading Scheme (UK ETS) to domestic maritime from July 2026. The draft Statutory Instrument on the expansion of the ETS to maritime has now been laid and approved across the UK Parliaments, providing certainty ahead of the expansion in July. Further guidance is available from the Environment Agency.

The final policy design of the ETS has been based on the best available evidence and responses to these consultations, with the aims of incentivising investment in decarbonisation and avoiding competitive disadvantages for UK shipping operators.

There will be no double-charging of emissions when ETS is expanded to domestic maritime in July 2026, as the UK ETS will apply to voyages beginning and ending in the UK, and to emissions at berth within the UK. These emissions are not in scope of the EU ETS.

In May 2025, the UK and the European Union (EU) agreed to enter into negotiations on an agreement linking the UK ETS and the EU ETS. Linking ETS’s is about making life easier for operators and aims to minimise the administrative burdens and unlock greater access to a larger market, supporting economic growth and decarbonisation. Continuing negotiations will determine the details and extent of alignment.