Expansion of UK Emissions Trading Scheme into the domestic maritime sector: Final Business and Regulatory Impact Assessment 2026

Section 5: Next Steps and Implementations

Recommendations/preferred options

It is recommended that policy Option A is carried forward, as this helps achieve the policy goal of expanding the UK ETS to UK domestic maritime while balancing the need to consider the financial costs on businesses. This policy option includes several exemptions, including exempting ferries serving Scotland’s islands and peninsula communities, which provides a balance between practical, socioeconomic and environmental considerations.

Implementation considerations/plan

While the maritime sector is new for SEPA, experience gained through the regulation of Aviation Operators will be utilised in the onboarding and approval of Emission Monitoring Plans. SEPA will proactively engage with maritime operators, communicating relevant information, providing opportunity for questions etc. SEPA will work closely with the UK ETS Authority and other regulators to support an orderly implementation and apply a consistent regulatory approach.

Post implementation review

Under article 17 of the Greenhouse Gas Emissions Trading Scheme Order 2020, the UK ETS Authority has a statutory requirement to undertake and publish a review by 31st December 2028 on the operation of the UK ETS and make appropriate recommendations for future operations. The review will cover some of the policy proposals in this BRIA, including:

• Consider lowering the current 5,000 GT threshold, potentially to 400 GT.
• Examine the potential introduction of a de minimis threshold for operators with very low emissions.
• Assess the feasibility of MRV for smaller vessels.
• Review of exemptions, including for ferries serving Scotland’s islands and peninsulas and for fish-catching and fish-processing vessels.

Declaration

I have read the Business and Regulatory Impact Assessment and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options. I am satisfied that business impact has been assessed with the support of businesses in Scotland.

Signed:

Date: 27/01/2026

Minister's name: Gillian Martin

Minister's title: Cabinet Secretary for Climate Action & Energy

Scottish Government Contact point: emissions.trading@gov.scot