THE UK Government has launched a consultation on how to implement its plans to expand the UK Emissions Trading Scheme to domestic shipping.

Companies have until January 23, 2025 to respond to implementation questions, such as the definition of a domestic voyage, thresholds for inclusion, the inclusion of methane and nitrous oxide emissions, and exemptions from the scheme.

“We would like to know whether you think that the proposed policy changes are feasible in practice and will achieve our objectives,” a statement said.

The UK ETS came into force in 2021, and in 2023 the ETS Authority decided to expand it to shipping from 2026.

In its current form, the cap-and-trade scheme would apply to ships of 5,000 gt and above on voyages between UK ports, or voyages starting and ending at the same UK port.

It will not cover voyages between the UK and crown dependencies (the Channel Islands and the Isle of Man) nor between the UK and British Overseas Territories (such as Gibraltar and Bermuda).

This sets the scheme apart from the far bigger EU ETS, which taxes 50% of emissions from voyages to and from the EU.

The ISM manager would be the entity responsible for compliance with the UK ETS under the plans, which are subject to change.

Details to be hammered out include how Irish ports are treated, since these are subject to the EU ETS.

The Government said: “We envisage that the inclusion of maritime within the UK ETS could help to overcome a key barrier to decarbonising the sector, which is that the prices of maritime fuels currently do not reflect their environmental costs.”