Climate Change Act 2008 (International Aviation and International Shipping) Regulations 2026

Baroness Bloomfield of Hinton Waldrist Excerpts

Monday 29th June 2026 Lords Chamber

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I thank the Minister for introducing today’s regulations. I know my noble friend Lord Moynihan is disappointed not to be here for this debate—the second one in a week on an instrument that we all believe will be deeply damaging to the economy. He offers his apology as he has to attend a long-standing political appointment to which he is committed. I declare my interest as the unremunerated chair of Eq.flight, working towards the development of nuclear-derived sustainable aviation fuel.

This House voted to regret last week’s instrument due to the nationwide effects that it will have on our economy and our way of life. Although this week’s is not quite so wide-ranging, we regret that the Secretary of State is taking his economic wrecking ball to two specific industries.

Before I speak to the economic impact that this statutory instrument and other associated measures the Government are taking will have, I first note that the implementation of the instrument raises concerns. The Explanatory Memorandum states:

“The exact methodology for determining the UK’s share of IAIS emissions for the purposes of measuring and reporting emissions from CB6 onwards will be determined separately by the Secretary of State, and before laying the first annual statement of UK emissions for the CB6 period”.


The Government are putting the cart before the horse.

International aviation and shipping will be expected to comply with regulations to help the Government reach their net-zero target without being told how and even when their emissions will be measured. But I note the Minister’s explanation of the methodology of the calculation of emissions for carbon budget 6 period.

This is becoming a worrying trend within the department. Two weeks ago, my noble friend Lord Moynihan rightly pointed out that the legislation brought forward to implement the RO to Exchequer policy in Northern Ireland was done without a comparable offer having been agreed with the Northern Ireland Assembly. Now, entire industries are to be expected to comply with net-zero policies without being told how to do so. Regardless of the policy’s aim, that is not how to instil business confidence in the Government’s plans. I hope that the Minister can today outline when we can expect to see the accounting methodology and more generally reassure the House that the department takes the practical implementation of policy as seriously as it does the principles behind it.

On the economic impact, this instrument is merely a formalisation of the Government’s recent drive to ensure aviation and shipping compliance with net zero. It will set into statute the adverse effects that government policy is already having. By carbon budget 7, shipping emissions are projected to have been reduced by more than 60%, at a net cost of more than £1 billion annually. This is to be done primarily through fuel switching. To incentivise this transition away from carbon-intensive fuel, the Government have extended the UK ETS scheme to the sector, at an up-front cost of more than £0.25 billion. That is despite the fact that alternative fuels still cost four times more than conventional fuel, while there are only two shore power facilities in the country.

The industry has said that these shortfalls would be manageable if the Government set out a clear revenue recycling plan to reinvest ETS proceeds into maritime transition, but they have yet to do so. The result is that the ETS scheme will operate as a tax rather than as a decarbonisation incentive for the industry that moves 95% of the UK’s goods. I hope that the Minister can outline how net zero-derived revenue will be recycled back into these industries in his response.

Similarly, the aviation industry will be forced to transition not through economic incentives but through state-mandated demand management. CB7 states that the supposed cost savings that net zero will bring the sector will come almost entirely through a reduction in demand operating capabilities. This will not happen naturally, but through “demand management” that will

“increase ticket prices, either directly through taxes or indirectly through technology costs”.

That is a highly unnatural market distortion. The industry will be forced to invest in net-zero technology, and if that fails in reducing emissions to the Government’s desired extent, they will simply raise taxes. This too is expected to cost over £1 billion annually by CB6.

These regulations incorporating these sectors into carbon budget accounting will now present an incentive for future regulations upon them. My worry is that aviation and shipping will now be seen as fair game to be sacrificed for the Government’s rushed drive to net zero. Given that the impacts of current regulations have already been highly damaging, I hope that the Minister will be able to reassure us that the regulations are entirely formal and that these sectors will not be subjected to future punitive measures.

--- Later in debate ---

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I thank all noble Lords for their contributions to this important debate and genuinely take note of their comments.

It is the speed of the rush to net zero that is harming our industry. I accept the entirely correct focus of the noble Lord, Lord Hunt, on the 1.5 million jobs and the contribution to the economy of the burgeoning green economy. However, these Benches are united on the focus needing to be on cutting energy bills. Our grandchildren will equally never forgive us if we destroy our economy with high energy prices. That must be a concern for us all. We currently have electricity prices which are four times higher than those of the US. That is the issue that we need to address.

Let us not ignore warnings from Tony Blair, who said that the net-zero policies being pushed forward are “unaffordable, ineffective” and “politically toxic”, or Gary Smith of the GMB, who recently said that the policies being pursued by the Government are “economic madness”. Even Unite the Union said:

“No ban without a plan”.


These points are worthy of consideration because the North Sea issue is very important. While everyone was distracted by Makerfield, an important referendum was, in effect, being undertaken in Aberdeen South. It was an overwhelming rejection of both measures in these climate change carbon budget regulations and the Government’s currently policy on the North Sea, which is referred to.

Having said all the above, I beg leave to withdraw the amendment standing in the name of my noble friend Lord Moynihan.

Amendment to the Motion withdrawn.