Draft Greenhouse Gas Emissions Trading Scheme (Amendment) (Extension to Maritime Activities) Order 2026
It is an absolute pleasure to serve under your chairmanship this morning, Sir Jeremy. The draft order affects the implementation of the UK emissions trading scheme, which replaced our participation in the EU ETS from 2021. As the Minister set out, the scheme was established under the Climate Change Act 2008 by the Greenhouse Gas Emissions Trading Scheme Order 2020. In the draft order, the Department seeks to expand the scope of the UK ETS in line with the Secretary of State’s net zero agenda. We saw just last week an instrument brought with the effect of reducing the free allowances under the scheme, increasing the carbon tax on industry from 2027 onward. The increasing cost on industry per tonne of greenhouse gas emitted is a burden that weighs on the UK’s industrial competitiveness. Food manufacturers, oil refineries, power stations and more are all subject to this framework. As the levy on emissions increases, naturally prices paid by end consumers are also driven up. That is why we have said that when we are re-elected to Government in three years’ time, we will repeal the ETS framework and begin to undo the great damage to Britain’s industrial base being done by the actions of this Government. We only hope that it will not be too late. The draft order requires maritime operators to participate in the scheme, enacting a requirement on ship operators to produce an emissions monitoring plan. The nominal purpose of this extension is to encourage decarbonisation in the maritime sector, which is a laudable aim—not that it will have any impact on global maritime emissions, given the fact that the USA, China, India and others have no plans to curb their emissions in the maritime sector. As a result, this mechanism will actually function purely as a carbon tax. To pretend otherwise would be this Government at their absolute abject worst. This is not a mechanism to decarbonise; it is a pernicious tax being levied on one of our most successful industries. Access to alternative fuels is not sufficient to decarbonise at the level required by the scheme. The infrastructure that the UK maritime industry requires to transition to low carbon simply does not exist at the scale that will be required. Worse, the industry is expected to comply in three months’ time, while still awaiting guidance to be published on how they can implement it. Even for this Government, that is either incompetence of the highest order, a deliberate attempt to squeeze a hard-pressed industry even more to make up for the shortfall in Treasury receipts as businesses and individuals up sticks and get out of the United Kingdom. The Department’s own impact assessment quotes an £85 million cost to British business as a result of this mechanism and we have not even turned to the burden that this mechanism is going to place on operators. This emissions monitoring plan represents a ridiculously onerous administrative burden on maritime businesses. Article 18 of the order details the facts to be logged on each voyage for ships completing fewer than 300 voyages per year, including: “(a) port of departure; (b) date and hour of departure; (c) port of arrival; (d) date and hour of arrival; (e) total amount of each type of fuel consumed; (f) emission factor for each type of fuel consumed; (g) amount of each greenhouse gas emitted.” The burden then falls on the maritime operator to produce a risk assessment to identify potential sources of error in data flows. I recite that content only to illustrate the extent of the burden that this regulation imposes on the sector. This instrument extends the ETS burden to the UK shipping industry to the tune of £175 million in administrative costs alone. That is utterly absurd. This is without doubt one of the worst pieces of legislation I have seen come before us in three Parliaments and nine years on Government Front and Back Benches and now in opposition. For every £1 spent on decarbonisation as a result of the framework, £8 will be spent on bureaucracy. That is insane. That does not support businesses or growth. The only thing growing here is the burden of red tape—the Government’s favourite colour—on UK industry. I take this opportunity to put on record my support for the specific exemptions made for fishing vessels and ferry services providing essential connectivity for Scottish islands. It is vital that they are exempt from the burden of the restrictions, albeit it is to be for only one year. One questions why the Isles of Wight and Man and the Scilly Isles are not afforded the same level of concern. 1 would argue, and I know my hon. Friend the Member for Isle of Wight East will argue, that the connections to those islands are just as vital as connections to the Scottish isles. Believe it or not, Sir Jeremy, it gets worse. Although the extension is a major blow to the maritime industry and UK shipping competitiveness overall, it is another death knell for the oil and gas industry, which is yet again being totally shafted by this Government. This instrument includes in its definition of offshore vessels those that support the oil and gas industry, which are not protected by the 5,000 GT threshold. The Government estimate that more than 145 oil and gas support vessels will be impacted by this instrument, but we know they do not care, because most of the vessels sail out of the port of Aberdeen, which is already suffering job losses as a direct result of the Government’s policies on oil and gas. Aberdeen city and shire have no Labour MPs or MSPs, so we know the party does not care about the fate of that city, its industry, economy or people. Those of us who live there feel that every day. What impact does the Minister think the extension will have on the north-east of Scotland and the UK oil and gas sector—a sector already suffering blow after blow from the Labour Government? What impact will that have on energy security? May I also ask the Minister what assessment he has made of the risk of carbon leakage in the maritime sector and whether he believes the safeguards under this instrument are sufficient? We do not simply oppose this instrument; we will vote against it. We oppose the UK ETS and carbon taxes that are crippling UK manufacturing and businesses and deindustrialising Britain at a criminal rate. On behalf of all those who this Government are harming by their reckless actions, we ultimately oppose this Government.