The UK Emissions Trading Scheme Authority has revealed that it’s consulting on proposals to expand the scheme to include emissions from the maritime sector and recognise non-pipeline transport methods for moving captured carbon into geological storage.

In terms of the proposed expansion, businesses with ships operating domestic voyages would need to obtain allowances for every tonne of carbon they emit. This would ensure that the price of fuels used by the sector better reflects their environmental impacts.

Further, recognising that industrial manufacturing sites without direct pipeline access to carbon capture and storage technology will require alternative transport options such as road, rail, or ship, the Authority is proposing to incentivise those operators by enabling them to deduct the transported amount from their reportable emissions.

The Authority has also confirmed planned changes to free allocation rules. The changes will ensure participants who permanently cease their operations cannot benefit from surplus free allowances in their final year. Additionally, there will be a decarbonisation exemption for sites ceasing activity to decarbonise.

In a joint statement, UK Emissions Trading Scheme Authority ministers Sarah Jones, Huw Irranca-Davies, Gillian Martin, Andrew Muir, James Murray, and Mike Kane, said, “Expanding the UK ETS to include maritime and recognising non-pipeline transport for carbon capture and storage will encourage investment into clean technologies, a vital growth industry in the UK.”

The UK ETS Authority is made up of the UK, Scottish, and Welsh governments and the Department of Agriculture, Environment and Rural Affairs for Northern Ireland. The scheme launched in January 2021, following the United Kingdom’s exit from the EU ETS, helps the UK to decarbonise across aviation, power and industry by setting a limit on emissions, with allowances that can be traded.

Read the full press release here.