UK Emissions Trading Scheme: Shipping
The question
To ask the Secretary of State for Energy Security and Net Zero, what assessment his Department has made of the relative costs to Northern Ireland of a) inclusion of maritime emissions in the UK ETS and (b) potential exposure to the EU Carbon Border Adjustment Mechanism.
Answered by Michael Shanks
The published Impact Assessment found the inclusion of maritime activities in the UK Emissions Trading Scheme to have a positive net present social value for the UK.
Independent analysis by Frontier Economics identified no material risk of carbon leakage, diversion of trade, or competitive distortion on Great Britain–Northern Ireland routes. Internal route-specific case studies also show very small effects on final prices, with increases of under 1% for typical freight goods.
On average between 2022-24 annual UK exports of goods in scope of EU CBAM were worth almost £7bn, and without a CBAM exemption, UK exporters could face associated costs.
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