Maritime Sector Soon Under Carbon Market In Britain

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A recent news article published in the Reuters states that Britain proposes to bring shipping sector into carbon market.

Britain to make changes to its emission trading system

Britain has launched a consultation on possible changes to its emissions trading system, including adding the maritime sector and tightening caps set under the scheme to help it meet its net zero emissions target, documents published on Friday showed.

Britain’s launched a domestic emissions trading system (ETS) in May last year to replace the European Union’s ETS after it left the bloc.

What does the scheme cover?

The scheme covers around 1,000 power plants, factories and airlines representing around a third of Britain’s emissions.

Shipping has so far not been included in Britain’s or the EU scheme, and the European Union is also seeking to charge shipping for its emissions in the face of resistance from some in the industry.

“We propose to include domestic maritime within the UK emissions trading scheme by the mid-2020s and will aim to provide more details on timing for implementation later this year,” the consultation document from the Department for Business, Energy and Industrial Strategy said.

The government sets gradual decreasing cap

Under the ETS, the government sets a gradually decreasing cap on the amount of emissions that a sector, or group of sectors, can produce. It creates carbon permits for those emissions and companies must buy one for each tonne of carbon dioxide (CO2) they emit.

The consultation said it will also seek to adjust the cap in the ETS from 2024 to align it with the country’s target of reaching net zero emissions by 2050.

Linking to the European Scheme

Many participants of the scheme have called on the government to link it to the European scheme, which would allow permits to be traded between them to create one shared carbon price and boost liquidity.

Benchmark carbon allowances in the UK scheme are trading around 77 pounds ($101.50) per tonne, with the equivalent EU contract around 78 euros ($85.91) per tonne.

“We are open to the possibility of linking the UK ETS internationally and will continue to work collaboratively with other jurisdictions,” the document said.

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Source: Reuters

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