| UK ETS extends to domestic maritime sector |
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Applicability: Shipowners, ship operators, ship managers, ship masters.
From 1 July 2026, the UK Emissions Trading Scheme (UK ETS) will cover domestic maritime transport on ships of 5,000 GT and above operating on domestic UK routes and in UK ports.
Shipowners and managers need to prepare now to ensure compliance as shipping companies will be legally required to monitor, report and surrender UK ETS allowances for greenhouse gas emissions (carbon dioxide (CO₂), Methane (CO4) and Nitrous Oxide (N2O)) from qualifying ships.
Reporting and allowance deadlines
The scheme’s first reporting period covers six months (1 July-31 December 2026). From 2027 onwards, the reporting period covers a calendar year (1 January-31 December). A verified emissions report must be submitted by 31 March (of the year following the reporting period) to the relevant regulators using the Manage Your UK Emissions Trading Scheme (METS) system.
Emissions allowances must be surrendered by 30 April (of the year following the reporting period). To allow maritime operators time to ensure they can meet these reporting requirements, there will be a one-off double surrender deadline for the 2026 and 2027 schemes of 30 April 2028. However, the verified report deadline for 2026 remains 30 March 2027.
Applicability of domestic UK ETS
The domestic UK ETS will apply to any companies operating a ship carrying cargo or passengers which:
- Undertakes a voyage between two UK ports (but excluding Crown Dependencies and British Overseas Territories).
- Undertakes activities in a UK port, irrespective of whether the preceding or next voyage is UK domestic or international. In‑port activities include hoteling, cargo operations and all movements within a UK port of call.
Exemptions to domestic UK ETS
The following ship types are exempt: armed services ships, law enforcement vessels, government surveillance/marine protection vessels, navigation/safe passage support vessels, fishing and fish processing vessels, publicly funded research vessels, coastguard and search and rescue vessels, medical emergency response vessels, non mechanically propelled ships, primitive wooden ships and Scottish ferry services.
Offshore vessels are only exempt until 31 December 2026.
UK emissions allowances
Each year regulated companies must purchase and surrender UK allowances equivalent to:
- 100% of emissions from UK domestic voyages and in‑port activities
- 50% of emissions from voyages between Northern Ireland (NI) and Great Britain (GB).
Regulated entities and UK ETS regulator
The regulated entity responsible for compliance with the UK ETS is the registered owner by default, unless these ETS responsibilities have been delegated by written agreement to the ISM company, and the regulator accepts the evidence. Responsibility for administering the UK ETS depends on where the operator is based and will be one of:
- Environment Agency (EA) – England and all non UK operators
- Natural Resources Wales (NRW) – Wales
- Scottish Environment Protection Agency (SEPA) – Scotland
- Department of Agriculture, Environment and Rural Affairs (DAERA) Chief Inspector – Northern Ireland.
These regulators will approve monitoring plans, receive emissions reports (through the common Manage Your Emissions Trading Scheme (METS) account), as well as enforcing compliance and imposing penalties.
Emissions Monitoring Plan approval
From 1 July 2026 – Each maritime operator must apply for approval (by their relevant regulator) of their Emissions Monitoring Plan (EMP) within 42 days of performing its first maritime activity. This EMP must be compiled at a company level (not at the ship level).
- NOTE: Verifiers are not involved in the approval of the EMP. Applications for an approved EMP must be made through the UK Manage your Emissions Trading Scheme (METS) platform.
- Early onboarding: The Environment Agency is supporting early onboarding of shipping companies into the UK ETS METS to get early approval of EMP before 1 July. For further information, use this link or contact etmaritimehelp@environment-agency.gov.uk. Early onboarding at this stage is free.
Timeline for compliance
For a full timetable of compliance please see UK ETS for Domestic Maritime | LR – Deadlines. Regulated entities must start collecting data as per their EMP for voyages and port activities in scope of the scheme from 1 July 2026.
Enforcement and penalties
Civil penalties may be applied where a company does not comply with the requirements of the domestic UK ETS, including:
Publication of non-compliant operators
Regulators will publish names of operators who are subject to emissions penalties.
For further information
For further information including access to the regulatory texts please visit:
- LR UK ETS page – UK ETS for Domestic Maritime | LR
