Final policy decisions made by the UK government this summer will, if enacted as law, lead to new emissions costs for vessels sailing to, from and between UK ports from July 1, 2026.
Law firm Stephenson Harwood explained that the expansion of the UK Emission Trading Scheme (ETS) to cover the maritime sector has been under discussion since 2022; while various details are still pending, the government’s interim response to the consultations during December was the first firm outlining of the details.
If sailing to, from or between UK ports, shipping entities will need to accommodate the UK ETS in their compliance and contractual regimes and pay the resultant costs. Stephenson Harwood said the registered owner of a vessel will be responsible for the compliance obligation by default; the obligation may be shifted to the International Safety Management (ISM) company if certain criteria are met.
Vessels of 5,000 gross tonnage and above will be subject to the regulations. The intention appears to be that offshore vessels will fall within the UK scheme albeit there could be provision for the rules to apply differently. The greenhouse gases covered are carbon dioxide, methane and nitrous oxide.
The reporting deadline will be March 31 each year following the relevant reporting period; allowances will need to be surrendered by April 30 each year following the relevant reporting period.
While the UK government initially focused on domestic emissions only, the decision to include all emissions generated in UK ports will also capture vessels on international voyages — albeit limited to their UK port emissions rather than the full international leg.
Another aspect of the policy decisions is the start date of July 1, 2026. This means the industry will need to prepare for compliance with new obligations quickly, whilst also continuing to wrestle with the first verification period of the EU ETS.
