The UK shipping industry has raised serious concerns over 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.

On Wednesday 11 February, 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, following limited Parliamentary scrutiny and despite broad-reaching concerns.

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.

To ensure the scheme is both workable and fair, the industry has urged further scrutiny of the measures and called for:

Ringfencing maritime ETS revenues for shore power, grid upgrades, retrofits and clean fuels.
Targeted protections for ferry‑dependent and island communities.
Alignment with EU ETS rules to avoid double‑charging and carbon leakage.
A phased or “monitor‑only” period until operators and ports have the systems required for compliance.
Industry representatives warn that the UK does not yet have viable fuel alternatives or the port energy capacity required to support low‑carbon operations. Alternative fuels currently cost four to five times more than conventional options, and most UK ports lack the shoreside electricity needed to power vessels in port.

Without Government reinvestment of ETS revenues, the scheme risks raising costs rather than driving emissions reduction.

Concerns are particularly acute for island and lifeline ferry routes, where fare increases would disproportionately affect residents who rely on maritime transport for essential services, food supply and economic activity.

Despite clear precedents such as protections for Scottish islands under the EU ETS, equivalent safeguards have not been committed for the UK.

The sector is also facing a compressed preparation period. The regulations were published on 13 January and come into force just six months later, requiring operators to finalise emissions monitoring plans, hire verifiers, upgrade systems and forecast financial impacts on extremely tight timelines, without full guidance or clarity from Government.

Industry warns this could divert investment away from decarbonisation projects already underway.

The Chamber is urging Government to:

publish full technical guidance,
revise the implementation timeline,
protect ferry‑reliant communities,
recycle ETS revenues into maritime decarbonisation and
ensure alignment with the EU and international frameworks.
The industry stands ready to work with Ministers to develop an approach that supports real emissions reduction while protecting essential UK connectivity.
Source: UK Chamber of Shipping