The UK could earn nearly $2 billion/year by expanding ETS to shipping - T&E

Transport & Environment (T&E) analysis shows that UK shipping emissions will generate £1.76 billion/year for the exchequer if they are included in the UK Emissions Trading Scheme (UK ETS).

PHOTO: Maersk Line container ship moored quayside at the Port of Felixstowe in Suffolk, England. Getty Images

“This amount, annually, would cover the government’s own estimated ~£800 million/yr [$960 million/year] cost of cleaning up the domestic shipping sector’s emissions twice over,” said the T&E.

T&E calculations have shown that the shipping sector emitted nearly 22 million mt of carbon dioxide (CO2) emissions in 2021.

Based on T&E's analysis, if the government implements its proposals and the UK ETS is expanded to the shipping sector, only 10% of these 22 million mt emissions would be included in the ETS. This would generate revenue of only £170 million/year ($204 million/year). T&E attributes this limitation to the government's current calculation of shipping emissions.

It has recommended switching to an “activity-based measure based on UK Monitoring, Reporting, and Verification (MRV) data” to ensure an effective measure of emissions inventory. It suggests that ETS should also be expanded to include all vessels above 400 gross tonnes (GT) and half of the emissions from UK international voyages.

“At present levels of emissions, the government would be walking away from £1.6 billion/yr [$1.92 billion/year] and leaving ~90% of UK shipping emissions unregulated,” it adds.

By Konica Bhatt

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