A pricey omission: not charging ships for their pollution costs the UK dearly

February 23, 2023

Now is the time to apply the polluter pays principle to UK shipping

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New analysis by Transport & Environment (T&E) shows that in 2021, carbon dioxide ( emissions from UK shipping were 22 million tonnes (Mt) – equivalent to 11 million cars. If included in the UK Emissions Trading Scheme (ETS), these emissions would generate ~£1.76bn for the Exchequer. This amount, annually, would cover the government’s own estimated ~£800m/yr cost of cleaning up the domestic shipping sector’s emissions twice over. 

Sadly though, this is not yet the plan despite the recommendations of the UK Climate Change Committee. If the government implements its proposals to expand the UK Emissions Trading Scheme (UK ETS) to shipping, T&E analysis shows that ~10% of those 22Mt would be included in the ETS, generating just ~£170m/yr. At present levels of emissions, the government would be walking away from £1.6bn/yr and leaving ~90% of UK shipping emissions unregulated. 

There are serious problems with how the government calculates UK shipping emissions, how it assigns responsibility for them and how it plans to regulate and, ultimately, abate them. To begin addressing these issues, the government must first ensure that the UK shipping emissions inventory is accurate and switch to an activity-based measure based on UK Monitoring, Reporting and Verification (MRV) data for all its shipping emissions. It should then expand the scope of the ETS to include all vessels above 400 gross tonnage (GT) and include 50% of emissions from UK international voyages.

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