U.K. May Include Shipping in New Emissions Trading Platform

The U.K. government is considering whether to include the shipping industry in its new carbon market as it seeks ways to eliminate transport pollution by 2050.

Maritime Minister Robert Courts said the U.K. may follow the European Union’s proposal to include shipping in its Emissions Trading System, where pollution limits are imposed on utilities, factories and airlines. Britain has developed its own emissions market as a result of leaving the bloc in January.

“We want to work with international partners, and collaboration and co-operation is key to progress in this sphere, across EU partners and the wider world,” he said in an interview.

The shipping industry is responsible for a huge amount of pollution. If it were a country, shipping would rank alongside Germany as the world’s sixth-largest emitter of carbon dioxide, according to the World Bank. But progress has been slow on helping the industry clean up.

Putting a price on carbon emissions through a market mechanism is designed to penalize polluters and encourage investment in green technology. The 16-year-old EU trading system, the world’s largest, is the centerpiece of the bloc’s efforts to meet tougher climate goals.

Courts’ comments came as his department opened bids for a 20 million-pound ($28 million) fund to help shipbuilders design a new generation of non-polluting vessels.

The fund is part of the Department for Transport’s plan to ensure that all vessels for U.K. waters ordered from 2025 will come with zero-emission-capable technologies. That would include everything from the vessels working on offshore wind farms to recreational sailing boats and yachts.

Courts said the fund wouldn’t discriminate between different types of technology, such as ammonia, hydrogen fuel cells, electric batteries or biofuels.

“It’s important as a government that we’re not prescriptive about what we think the answer is going to be,” he said. “We want to give people that initial impetus to go away and investigate the different solutions and then to come up with what will work best.”

But the funding is just a small fraction of the investment that will be needed to eliminate pollution from the shipping industry. The independent Climate Change Committee estimates that zero carbon shipping would require spending of 160 million pounds a year in 2035, rising to 350 million pounds a year by mid century.

Shipping isn’t currently included in the U.K. government’s target to eliminate greenhouse gas emissions by 2050, but Prime Minister Boris Johnson included the 20 million pound funding for the industry as part of his green 10 point plan announced in November.

©2021 Bloomberg L.P.

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