Joint letter: Urgent need to bring forward the Emissions Trading Scheme to include international shipping emissions by 2027
We urge the UK Government to bring forward the extension of the UK Emissions Trading Scheme (UK ETS) to international shipping from 2028 to 2027. Delaying until 2028 will postpone the benefits of alignment with the EU, delay potential investment opportunity
The Common Understanding reached at the UK–EU Reset Summit identified alignment of emissions trading schemes as a key step in levelling the playing field for industry and avoiding trade friction. With the European Union’s Emission Trading System (EU ETS) already covering international shipping emissions, it is logical and necessary for the UK to follow suit as soon as possible. Waiting another year would delay the strategic, environmental, and economic advantages that come from an aligned and coherent carbon pricing framework.
Advancing the extension to 2027 could generate approximately £574 million in additional revenue for the UK Exchequer. This funding could be invested directly in the decarbonisation of the UK maritime sector, supporting projects such as the development of onshore power connections at ports and kickstarting the domestic green shipping fuels industry. Such investments would not only accelerate progress toward the UK’s net zero goals but also drive industrial regeneration and skilled employment in coastal regions.
This is more important than ever with the current oil crisis due to the closure of the Strait of Hormuz costing the sector billions. Investing in the sector's decarbonisation will help to improve national and energy security by reducing vulnerability to global geopolitical price and supply shocks. Powering shipping with renewable fuels that can be produced in the UK and rely on locally produced energy, would reduce reliance on imported fossil fuels and strengthen the UK’s long-term energy resilience.
By bringing the UK ETS extension forward by just one year, the Government can send a clear signal of its intention to maintain regulatory alignment with key trading partners, deliver measurable environmental and fiscal gains, position the UK as a frontrunner in clean shipping and promote the sector's energy dependence.
Download our joint letter to read in full.
