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.
It warned that the policy risks harming UK competitiveness, increasing costs for island communities and slowing progress towards net zero.
On 11 February, the Draft Greenhouse Gas Emissions Trading Scheme (Amendment) (Extension to Maritime Activities) Order 2026 was passed by the House of Commons, following limited parliamentary scrutiny and despite broad-reaching concerns from across the sector.
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.”
The Chamber noted that it has publicly called for the global shipping industry to reach net zero emissions by 2050, ahead of commitments made by the UK Government and the International Maritime Organization (IMO), and said members have invested in new technologies and innovations to support decarbonisation.
To make the scheme workable and fair, the industry has called for closer scrutiny and specific measures.
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These include ringfencing ETS revenues for shore power, grid upgrades, retrofits, and clean fuels; protecting ferry-dependent and island communities; aligning with the EU ETS to prevent double-charging and carbon leakage; and introducing a phased or “monitor-only” period until operators and ports are ready 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, the Chamber cautioned.
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, and under the EU ETS, equivalent safeguards have not been committed for the UK.
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The sector is also facing a compressed preparation period. The regulations were published on 13 January and came 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 the Government.
Industry representatives warn that this could divert investment away from decarbonisation projects already underway.
The Chamber is urging the Government to publish full technical guidance, revise the implementation timeline, protect ferry-reliant communities, recycle ETS revenues into maritime decarbonisation and ensure alignment with EU and international frameworks.
Industry leaders said they stand ready to work with Ministers to develop an approach that supports real emissions reduction while protecting essential UK connectivity.
For more information:
UK Chamber of Shipping – https://www.ukchamberofshipping.com/
