The Government’s announcements and subsequent consultation on how to make the UK ETS net zero compliant are welcome. The UK has already committed to reducing emissions from international aviation and shipping by including those emissions in its carbon budgets from 2033 onwards. However, since then no actual regulations have been introduced to achieve this, and so the proposals outlined in the consultation are good first steps. Unfortunately though, they don’t go far enough.
The decision to exempt international shipping will exempt 60% of UK shipping emissions, forego revenues and fundamentally undermine decarbonisation efforts. The decision to continue awarding free allowances to airlines, and not including all departing flights, whatever the destination, in the ETS also undermine decarbonisation efforts.
Therefore, the UK’s shipping ETS should include the UKs share – 50% – of international shipping emissions within the ETS. It should also ensure an appropriate ETS scope, by regulating all relevant greenhouse gases (GHGs), all ships above 400 GT and all ship types, not just those carrying cargo and passengers.
In a similar vein, free allowances to airlines should be completely withdrawn from 2024, and all departing flights should have to surrender allowances for the emissions they produce, whatever the destination, regardless of the airline.