£1bn How much the UK government is missing out on
The UK is missing out on £1bn a year in tax revenues by not charging for shipping emissions from vessels calling at UK ports, a new T&E study shows. This would provide a much needed boost to public finances, says T&E.
The government is currently looking into expanding the UK Emissions Trading Scheme to the maritime sector. Under current plans, the ETS would only cover emissions from larger vessels in the UK’s ports, and those from domestic-only voyages. This would exclude 85% of UK shipping emissions from the ETS and forfeit the same proportion of revenues.
If the UK were to include the shipping industry’s fair share of emissions in the ETS, the UK government could raise £1bn annually - enough, for example, to pay for 24,000 new nurses. The funds could also be used to scale up the production of green fuels for shipping delivering UK growth and green jobs.
Jon Hood, UK sustainable shipping manager at T&E, said: “Every year a billion pounds is lost at sea. Charging ships for their fair share of UK shipping emissions is a win-win for the exchequer. The costs would mostly be borne by large, international ship operators. These companies are highly profitable and these charges would be peanuts to them, but would provide the government with significant funds to pay for public services or scale up green technologies.”
T&E recommends that the UK government includes 100% of domestic and port emissions, and 50% inbound and outbound international emissions from all commercial vessels above 400 gross tonnage making UK port calls. This would apply the polluter pays principle and more closely align the UK with the approach of the European Union (EU), which already charges for shipping emissions and is expected to raise £6 billion annually.
UK shipping emissions in 2023 were almost 21 MtCO2e, representing around one-fifth of total UK transport emissions.
Notes
T&E is currently running an ad campaign around Westminster to highlight the £1 bn the UK government is missing out on. Image is free to use.
