UK government must focus on green shipping investments – Maritime UK
The next UK Government must prioritise funding for green marine fuels and bunkering infrastructure, industry body Maritime UK has urged.
PHOTO: Aerial view of Port of Liverpool, UK. Getty Images
UK general elections are expected to be held in January 2025, about 25 days after the dissolution of the current parliament on 17 December this year.
Ahead of the elections, UK-based shipping industry organisation Maritime UK has laid out the sector's recommendations for the next government. Maritime UK members include industry organisations like the UK Chamber of Shipping, British Ports Association and Institute of Chartered Shipbrokers.
Government should increase allocation of public funds under the UK Shipping Office for Reducing Emissions (UK SHORE) to develop low- and zero-emission marine technologies, according to Maritime UK. Over the past three years, UK SHORE allocated about £206 million ($258 million) towards the research and development of clean maritime technologies.
According to Maritime UK, it is critical to unlock private sector financing for the development and production of green marine fuels and technology. Tonnage tax reforms to ensure "the UK retains a competitive tax environment" and green tax credit benefits could be used to achieve this, it suggested.
"Tonnage tax is an alternative method of calculating Corporation Tax profits by reference to the net tonnage of the ship operated," according to the UK government's official website.
“The future government could provide greater clarity around green investment by introducing incentives for industry such as increased capital allowances, green tax credits, and abolishing VAT on the sale of maritime fuel,” the manifesto highlighted.
Green tax credits are financial benefits that can reduce tax liabilities and encourage investments in environment-friendly projects.
The report noted that if shipping emissions are included in the Emissions Trading System (ETS), the revenue generated should be used for green bunker fuel deployment.
The UK ETS is currently planned to expand to domestic maritime from 2026, according to the UK Parliament. HM Treasury estimates show that inclusion of shipping emissions under UK ETS could raise £310 million ($388 million) over three years starting from 2026-27.
Maritime UK proposed prioritising funds to advance green bunkering infrastructure in the UK. It suggested aligning the UK government's funding ambitions with the US Clean Ports Program or the EU's Innovation Fund.
“The uncertainty about future usage and adoption of green fuels undermines investor confidence in committing to new and alternative bunkering facilities, despite the long term environmental and economic benefits,” it argued.
It also requested additional grid capacity to handle a possible increase in electricity demand from shore power supply at UK ports.
By Konica Bhatt
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