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Net Zero, Energy and Transport Committee 03 February 2026 [Draft]

03 Feb 2026 · S6 · Net Zero, Energy and Transport Committee

Item of business

Subordinate Legislation

Greenhouse Gas Emissions Trading Scheme (Amendment) (Extension to Maritime Activities) Order 2026 [Draft]

Martin, Gillian SNP Aberdeenshire East Watch on SPTV

I am pleased to provide evidence supporting the draft Greenhouse Gas Emissions Trading Scheme (Amendment) (Extension to Maritime Activities) Order 2026. The ETS authority, formed and jointly run by the four nations of the UK, is extending the scope of the scheme to include emissions from domestic maritime activities. That builds on the existing coverage of aviation, power generation and energy-intensive industries within the UK ETS. It incentivises cost-effective maritime decarbonisation and encourages efforts across our society and communities towards net zero goals.The expansion is focused on emissions related to domestic voyages between UK ports as well as emissions at berth in UK ports, and it will apply to ships of 5,000 gross tonnage or more. In response to extensive stakeholder feedback, there will be exemptions for specific activities, such as search and rescue activities and humanitarian aid, and specific types of ship, including publicly funded research vessels.Importantly for Scottish interests and for our support for islands and peninsular communities, ferry services in Scotland are also exempt from the scheme, as they maintain essential connectivity to those areas, and fish catching and processing vessels are also exempted. The instrument that is under consideration provides technical detail on the practical aspects of bringing the domestic maritime sector into the UK ETS, including on the regulation of operators, the monitoring and analysis methodology, and annual reporting on maritime emissions.As in other sectors that are included in the scheme, owners of in-scope vessels or, on their behalf, those to whom the responsibility is delegated will purchase allowances for each tonne of carbon dioxide emitted and surrender them at the end of each scheme year. For maritime emissions, there will be a surrender reduction for voyages between Great Britain and Northern Ireland, in order to avoid a carbon pricing imbalance.As the expansion to domestic maritime emissions will occur in July this year, arrangements will also be in place to allow double surrender of allowances for both the shorter 2026 and full 2027 scheme years by April 2028.The instrument adjusts the ETS cap to account for the maritime sector. The scheme will extend to vessels that provide support or services for offshore structures from January 2027. Including those ships at a later date is an alignment approach that is taken in the EU ETS that avoids market distortions ahead of their equivalent inclusion in the EU scheme.The ETS authority has consulted extensively on the inclusion of domestic maritime in the UK ETS, in order to ensure that it is incentivising emissions reduction in a way that is fair and that accounts for industry best practice. In doing so, it has engaged with businesses across the UK and has held specific workshops with our island communities.The instrument represents an important step in the on-going development of the UK ETS, recognises the importance of maritime operations to our economy and net zero journey, and lays the groundwork for future expansion to international voyages, which was the subject of a recent authority-wide consultation.The business and regulatory impact assessment for the instrument was laid on 30 January, after extensive engagement with Scottish businesses.

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Net Zero, Energy and Transport Committee 03 February 2026 [Draft]

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