The UK Emissions Trading Scheme Authority (UK ETS) has unveiled a host of reforms to facilitate its path to decarbonisation, including addition of domestic maritime transport to the scheme from 2026.
The scheme, which is jointly run by the UK Government, Scottish Government, Welsh Government and the Department of Agriculture, Environment and Rural Affairs in Northern Ireland, was introduced in 2021. It puts a limit on the amount of total greenhouse gases (GHG) that the energy-intensive industries can emit.
Under the scheme, the companies must obtain allowances for every tonne of emission they release each year. While companies that are successful in cutting their emissions can sell their unused allowances to other firms. It basically “incentivises decarbonisation through a process of buying and selling emissions allowances,” the UK Government says in a statement.
For the domestic shipping industry, the scheme will be applicable to only large vessels of 5000 gross tonnage (GT) and above.
“The decisions taken here will not only put us on the path to net zero, but will also support crucial industries on their path to long term sustainability,” UK Member of Parliament (MP) Gareth Davies says.
But the Climate Change Committee (CCC) believes otherwise
CCC has advised the UK government to ramp up its efforts on shipping decarbonisation as carbon dioxide (CO2) emissions have increased.
The new yearly report from CCC states that even though the UK government has been devising new climate policies, these are not ambitious enough. It highlights that shipping emissions in the UK have come down at a very slow pace. In fact, “they were 12.2 megatonnes of CO2 equivalent in 2022, up 1% from 2021,” the report adds.
CCC argues that at this rate the UK will fail to fulfill the climate targets set in the Paris Agreement in 2015 to limit the temperature increase to 1.5°C above pre-industrial levels.
Transport and Environment (T&E) also critical of the new reforms to the scheme
According to T&E UK’s sustainable shipping manager Jonathan Hood, primary concerns regarding the provisions set for the shipping industry in the scheme are:
• The scheme only includes domestic vessels, thus excluding nearly 80% of UK’s shipping emissions
• The qualification threshold of 5000 GT and above results in exclusion of almost half of UK’s domestic shipping emissions
• There are no plans to utilise revenues collected from ETS scheme on decarbonisation measures
“If these proposals are implemented, almost 90% of UK shipping emissions will be excluded from the ETS,” a T&E analysis shows.
Instead, T&E recommends that all vessels – domestic and international – above 400 GT making UK port calls should be included in the ETS scheme. It further states that ETS should aim to capture 50% of international emissions initially, and then increase it to 100% by the end of the decade.
Support for and opposition to GHG levy not down to a developed-developing country divide
While the UK meanders with its decarbonisation policies, the US and Australia are yet to express support for the proposed global GHG levy.
Notably, two small island nations from the Pacific – the Marshall Islands and the Solomon Islands – were the first to propose the universal GHG levy.
At the Intersessional Working Group on Reduction of GHG Emissions from Ships (ISWG-GHG 15), seven African states namely – Angola, Gambia, Ghana, Kenya, Liberia, Namibia and Sierra Leone – have supported the levy through written submission, senior lecturer at the University of Melbourne Christiaan De Beukelaer says.
This truly puts the “developed-developing country divide” argument to question, he adds.
Source: ENGINE (https://engine.online/news/regulations/uks-inclusion-of-shipping-in-ets-scheme-from-2026-falls-short-4d22)