UK ETS for Shipping: What to Expect
The UK Emissions Trading Scheme (UK ETS) is the United Kingdom’s carbon-pricing system, introduced in 2021 as a replacement for the EU ETS. The UK ETS Authority has confirmed that the scheme will be extended to the maritime sector from mid-2026, following an interim consultation and industry feedback process.
UK ETS: Scope and Coverage
Based on the UK Government’s current proposals, the UK ETS for shipping will in its initial phase:
Apply to vessels of 5,000 gross tonnage (GT) and above.
Cover domestic voyages between UK ports and emissions from ships at berth in UK ports.
Require ship operators to monitor, report and verify (MRV) their CO₂ emissions in line with UK ETS requirements.
Further expansion such as to international voyages may be considered in later phases, but details have not yet been finalised.
Allowances and Compliance
According to the UK ETS Authority’s current plans, companies covered by the maritime extension will be required to acquire and surrender UK allowances (UKAs) to cover their verified emissions.
UKAs are distinct from EU allowances (EUAs), though the UK Government has indicated its intention to coordinate with other carbon markets to avoid double counting where possible.
Indicative Timeline:
2025: Preparatory steps and reporting guidance are expected to be finalised.
Mid-2026: The UK ETS maritime extension is planned to begin, subject to final legislation.
2027 onwards: The first compliance cycle is anticipated to take place based on verified 2026 emissions data.
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