UK to Include International Shipping in Emissions Trading Scheme From 2028

The UK ETS for domestic shipping was announced in 2023. File Image / Pixabay

The UK expects to include international shipping in its emissions trading scheme from 2028.

From January 1, 2028, the UK will include 50% of emissions from international voyages to and from the UK by ships over 5,000 GT in size in its emissions trading scheme, the country's finance ministry said in supporting documents to its annual budget on Wednesday.

100% of emissions from voyages between Great Britain and Northern Ireland will also be included.

The measure is expected to raise £285 million in revenue for the British government by the 2030-31 financial year.

The inclusion of international shipping in the UK ETS is expected to raise £285 million in revenue by the 2030-31 financial year. Image Credit: HM Treasury

"This costing does not include any adjustment for a behavioural response," the ministry said.

"The emissions data used in the tax base already incorporates expected changes in demand.

"This accounts for the UK ETS Authority initially increasing the number of allowances to account for the extra emissions brought into scope of the scheme, in line with the new expected tax base."

The UK announced in 2023 that domestic shipping would be included in the UK ETS from July 2026. 

In May 2025 the British government said that as part of plans for 'dynamic alignment' between the UK's and EU's ETS, international shipping would be included in time, but did not set out a clear deadline.

ICE December futures for UK allowances for the UK ETS traded at £57.40/mtCO2e (EUR 65.50/mtCO2e) on Thursday morning, compared to EUR 81.22/mtCO2e for the equivalent EUA contract for EU-ETS compliance.

Emissions trading systems for shipping work by requiring shipping firms to purchase allowances for each tonne of GHG emissions released on their voyages. The number of allowances made available is capped and gradually reduced over time, driving up the price and encouraging further decarbonisation.

Shipping has been included in the EU-ETS since January 2024, with the system being gradually phased in up to 2026.