The UK expands its carbon market to include maritime shipping from today

The UK has expanded its emissions trading scheme to include domestic maritime shipping, covering cargo and passenger vessels of 5,000 gross tonnage and above into the country's carbon market from today.

The UK ETS now applies to voyages between UK ports as well as operations in ports, including cargo operations, mooring, and movements within the port. Operators must monitor emissions of carbon dioxide, methane, and nitrogen oxides and surrender UK allowances equivalent to their verified emissions.

The scheme is separate from the EU ETS, meaning that qualifying vessels may be required to comply with both regimes depending on their trading routes.

The default liability rests with the registered owner, although it can be delegated to an ISM company through a legally binding written agreement related to the operation of the vessel, compliance with the ISM Code, and obligations under the UK ETS. If the delegation is not valid, the liability remains with the registered owner.

Operators must create a maritime operator account in the Manage your Emissions Trading Scheme reporting service and submit a monitoring plan application within 42 days of their first qualifying activity under the UK ETS. Annual emissions reports must be independently verified and submitted by March 31 of the year following the scheme year.

The first year of the maritime scheme runs from July 1 to December 31, 2026, after which it will transition to a calendar year starting in 2027. Allowances for 2026 and 2027 must be surrendered by April 30, 2028.

Ships operating in open seas are exempt until the end of 2026, with compliance becoming mandatory from January 1, 2027.

This move adds another layer to the growing compliance burden of carbon regulations in shipping, requiring operators working in the UK to align monitoring, verification, and allowance procurement with existing EU and IMO requirements.