A new analysis from the International Council on Clean Transportation (ICCT) warns that the United Kingdom’s upcoming expansion of its Emissions Trading Scheme to cover shipping will leave the vast majority of maritime emissions unregulated — and urges a broader scope to close the gap.
According to the ICCT report, released on Tuesday, ships on UK-related voyages emitted 16.4 million metric tons of CO2 equivalent in 2023. Of that total, international voyages accounted for 12.1 million metric tons — by far the largest portion of UK-related shipping emissions.
What the Current Framework Covers
As reported by Ship & Bunker, the UK ETS in its current form will apply from July 1, 2026, to vessels of 5,000 gross tonnes and above operating between UK ports, as well as emissions generated while at berth or anchor in UK waters. Domestic maritime emissions will be brought under the scheme from that date.
However, the ICCT calculates that this scope would cover only 2.5 million metric tons of CO2 equivalent — approximately 15% of total UK-related shipping emissions. The bulk of international voyage emissions would remain outside the system entirely.
The Case for Broader Coverage
The ICCT analysis identifies two key pathways for expanding the scheme’s reach:
- Including 50% of emissions from UK-international voyages for ships above 5,000 GT could more than triple current emissions coverage and generate between £290 million and £360 million in annual revenue.
- Extending the scheme to vessels below 5,000 GT could raise total coverage to 10.3 million metric tons of CO2 equivalent and push annual revenue as high as £710 million, according to the ICCT.
Beyond revenue, the organisation argues that broader coverage would reduce the incentive for operators to restructure routes or deploy smaller vessels specifically to avoid costs under the scheme — a form of regulatory arbitrage that a narrowly scoped ETS could inadvertently encourage.
Does This Matter to You?
This development is directly relevant to vessel operators, charterers, and shipping companies with routes touching UK ports. As the UK ETS takes effect, those operating internationally could find themselves partially outside the compliance framework — for now. However, the ICCT’s recommendations, if acted upon, could significantly expand the number of voyages and vessel types subject to carbon costs in UK waters.
Port operators and bunker suppliers in UK-adjacent regions may also need to monitor how coverage decisions influence vessel routing choices and fuel demand patterns. Compliance teams and commercial operators should track regulatory developments closely as the UK government considers the future scope of its maritime ETS.
The ICCT report does not address a specific timeline for when or whether the UK government might act on these recommendations. The direct policy outcome remains to be seen.
Gulf Bunkering does not provide operational or security guidance. This article is for informational purposes only. Operators should consult flag state authorities, P&I clubs, and relevant advisories for decisions relating to transit planning.
Sources: Ship & Bunker
