Posted on: 19 January 2026
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 United Kingdom ports from 1 July 2026.
The policy decisions follow industry consultations initiated in November 2022 and 2024 concerning expansion of the UK Emissions Trading Scheme (ETS) to emissions from shipping. While decisions on numerous details are still pending, the UK Government’s interim response to the consultations constitutes the first firm outlining of the UK ETS for maritime and, importantly, communicates to the industry what it needs to start preparing for.
Going forwards, 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 UK ETS costs arising.
This recent development should be particularly noted by registered owners (including banks and financiers) as, like the EU ETS, the registered owner of a vessel will be the party with the compliance obligation by default, notwithstanding that the obligation may be shifted to the ISM company if certain criteria are met.
The development is also significant for the offshore sector. The sector position is somewhat uncertain pending the UK Government’s final consultation response. However, 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. If so, this will mean offshore ships will be subject to the UK ETS ahead of the EU ETS, which extends to include offshore ships of and above 5,000 GT from 1 January 2027 pursuant to EU monitoring and reporting obligations becoming applicable this year.
Moreover, whilst the UK Government’s proposals have consistently been orientated toward the capture of domestic, rather than international, emissions (i.e. those emissions produced on journeys between UK ports only), the UK Government’s decision to include all emissions produced in UK ports will bring vessels performing international voyages within the scheme – even if only in relation to UK port emissions and not the emissions of international voyage.
A further notable aspect of the policy decisions is the start date of 1 July 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, the first reporting period of FuelEU Maritime and the prospect of the potentially forthcoming IMO NZF regulations.
Whilst adaptations made to accommodate the EU ETS will stand the industry in good stead, it will be important for shipping entities to recognise that the UK scheme, whilst exhibiting similarities to the EU scheme, will be separate and in some respects fundamentally different, and that compliance and contractual regimes will need to be re-designed and re-visited accordingly.
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