The UK Emissions Trading Scheme (ETS) Authority has recently introduced a series of reforms to limit emissions in the industrial, power, and aviation sectors, effective from 2024. As part of these reforms, the emissions cap will be extended to include additional sectors within the UK, such as domestic maritime transport and waste.

This development marks the first inclusion of domestic maritime transport, waste incineration, and waste from energy sectors in the scheme. Under the expanded scheme, domestic maritime transport will be included from 2026, and it will specifically apply to large maritime vessels with a gross tonnage of 5,000 and above, according to a report by G-Captain.

The UK ETS, introduced in 2021 to replace the country's participation in the EU ETS, operates by facilitating decarbonization through the trading of emissions allowances. Companies are required to obtain allowances corresponding to their annual emissions. If a business successfully reduces its emissions, it can sell any unused allowances to other firms.

In a joint statement, Ministers of the UK ETS Authority emphasized the significance of accelerating the transition from fossil fuels to greener and more secure energy sources. 

The UK Chamber of Shipping (UKCS) has also welcomed the inclusion of domestic maritime transport in the ETS. A UKCS spokesperson said: “This announcement is a significant step forward in the journey to reach net zero emissions from domestic shipping in the UK, although international agreements remain the best way to deliver lasting change across the sector.”