UK Emissions Trading Scheme Expands to Maritime Sector and Carbon Transport Solutions

The UK Emissions Trading Scheme (UK ETS) Authority is seeking to expand the scheme to include emissions from the maritime sector and recognize non-pipeline transport methods for moving captured carbon into geological storage. Launched in 2021, the UK ETS aims to support decarbonization efforts across aviation, power, and industry by setting a cap on emissions and creating tradeable allowances that incentivize businesses to reduce their emissions. The expansion of the scheme to include the maritime sector will require businesses operating ships on domestic voyages to obtain allowances for emitted carbon, ensuring that the cost of fuels used reflects their environmental impact.

In addition to expanding to include the maritime sector, the UK ETS Authority plans to make changes to free allocation rules to prevent participants who cease operations from benefiting from surplus allowances in their final year. The authority also recognizes the importance of carbon capture and storage for achieving net-zero targets, particularly in energy-intensive sectors like steel, cement, and chemicals. Sites without direct pipeline connections will need alternative transport options to access carbon capture and storage technology, such as road, rail, or ship.

The UK ETS Authority ministers highlighted the importance of expanding the scheme to include maritime emissions and recognizing non-pipeline transport for carbon capture and storage as a way to encourage investment in clean technologies. Proposed changes are set to take effect from 2026. In a broader context, the EU Emissions Trading Scheme (EU ETS) is a key component of the European Union’s efforts to combat climate change by reducing greenhouse gas emissions. As part of the Fit for 55 package, the European Commission proposed including shipping in the EU ETS to address the sector’s significant contribution to global CO2 emissions.

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