This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.
This is the report summary, read the full report.
In December 2023 we reported on the progress the Government was making on policy to reduce the greenhouse gas emissions from UK aviation to meet interim and overall net zero targets set by Ministers. In this report we examine the progress the Government is making in respect of UK domestic and international shipping. We cannot report on progress against targets because Ministers have as yet set no detailed targets for the sector.
International shipping emissions are subject to regulatory standards laid down in treaties adopted by the International Maritime Organization (IMO) and implemented by its member States. UK legislation to limit shipping emissions therefore follows the standards set at the IMO. Progress at the IMO in delivering more robust standards for the carbon intensity and greenhouse gas emissions from ships has been criticised by campaigners, but the findings of the most recent IMO study on GHG emissions from shipping appear to have led to genuine progress: the IMO’s current five-year strategy for reducing emissions, adopted in September 2023, was more ambitious than many expected. The IMO strategy still fails to align with a pathway consistent with achieving Paris targets for limiting warming to no more than 1.5°C by 2050, and the target date for achieving net zero emissions is vague: these are matters to be addressed not later than the next iteration of the strategy. The UK must work to deliver agreement at the IMO on regulatory measures which will at a minimum deliver the strategy’s goals, and provide support to other IMO States in their implementation of such measures.
One measure under active discussion at the IMO is the introduction of a global greenhouse gas emissions levy, which appears to be gaining support among IMO States. This global levy would effectively supersede the inclusion of shipping in the EU Emissions Trading Scheme, an amendment to the scheme which took effect in January 2024. The UK Emissions Trading Scheme Authority has as yet declined to extend the UK ETS to cover shipping. This raises a potential risk of carbon leakage from the EU’s greenhouse gas reduction regime. To mitigate this risk the UK ought to press for early adoption of the IMO pricing measure and implement it for UK shipping without delay.
The Government has announced its intention to include the UK’s share of international aviation and shipping emissions in the emissions to be reckoned against the Sixth Carbon Budget for the period 2033 to 2037, and is considering whether to include these emissions in the UK’s Nationally Determined Contribution for 2035 to be submitted to the United Nations under the Paris Agreement process. Legislation to give statutory effect to this commitment, made in April 2021, has still not been presented to Parliament for approval. The current method of reckoning the UK’s share of greenhouse gas emissions from international shipping is based on the UK’s reporting of fuel sales to the sector. This method risks underestimating the true proportion of GHG emissions attributable to international shipping from UK ports, as a disproportionately large amount of refuelling for voyages to and from the UK is undertaken at Rotterdam and other overseas ports. We heard that a voyage-based measure was more likely to give an accurate picture of the proportion of international shipping emissions attributable to the UK. The Government should undertake an urgent assessment of the merits of a voyage-based measure for reckoning UK shipping emissions, and should introduce the legislation necessary to include international aviation and shipping emissions in the Sixth Carbon Budget without further delay.
Government policy on reducing emissions from UK shipping is in danger of drifting unless Ministers seize the opportunity to set a clearer course for the sector. A refresh of the Clean Maritime Plan, the Government’s principal strategy for decarbonising shipping, was initially promised in 2022 and is yet to be published. UK SHORE, the unit established within the Department for Transport to drive emissions reduction policy, appears to have no specific objectives or targets set, and its funding after March 2025 has not yet been guaranteed. There have been worrying slippages in the implementation of promising policies, such as the development of capacity in clean maritime clusters for the manufacture of zero-emission maritime fuels, and the provision of electrified shore power in UK ports. Ministers have not yet set overall and interim targets for reductions in UK shipping emissions: without these it will be more challenging to drive emission reductions across the sector.
The Government has allocated over £200 million in match funding to research and development initiatives for reducing maritime emissions from 2019 to 2025. This funding is welcome: but it compares unfavourably with the treatment of the aviation sector. Funding for development of zero-emission shipping initiatives must be guaranteed until at least 2030.
The Government appears hesitant in its commitment to developing manufacturing capacity for zero-emission fuels in the UK. Studies show that establishing production facilities dedicated to serving particular clusters of shipping routes could bring dividends from first-mover advantage and could kick-start the production of zero-emission fuels on a commercial basis. Ministers should develop a strategy to support the manufacture of zero-emission maritime fuels in the UK and should consult on the introduction of a revenue support mechanism to incentivise early-stage production.
The overall Government targets for reducing emissions from UK shipping must be supported by stretching targets for improving operational efficiencies: greater efficiency is essential to reducing overall fuel consumption and limiting the volume of fuel storage required on board vessels. The UK should maximise its advantages as the jurisdiction of choice for international shipping law, and as the home of the UK Hydrographic Office, to leverage measures to increase shipping route optimisation. Ministers ought to consider the benefits of requiring vessels to meet a carbon intensity standard before being allowed to enter UK ports. Measures to deliver shore power from renewables to UK ports must be proceeded with swiftly. Initiatives to establish green shipping corridors originating from UK ports should be supported to the fullest extent possible.
The refresh of the Government’s Clean Maritime Plan is long overdue. The revised Plan must respond positively to the IMO’s increased ambition for decarbonising international shipping, and set stretching yet deliverable objectives and actions for UK shipping. It ought at a minimum to contain specific overall and interim targets for decarbonising shipping, together with a credible plan to achieve them. The plan ought to comprise a strategy for developing hydrogen-based zero-emission maritime fuel production in the UK, with associated transmission and storage facilities; a strategy to maximise the UK’s contribution to international shipping route optimisation; and a plan to deliver decarbonised shore power to UK ports. The new Clean Maritime Plan should be issued not later than September 2024.