Greenhouse Gas Emissions Trading Scheme (Amendment) (Extension to Maritime Activities) Order 2026

Lord Ashcombe Excerpts

Thursday 12th March 2026 Lords Chamber

[Lord Berkeley (Lab)]

My Lords, I am grateful to my noble friend for introducing this draft order and the many noble Lords who have expressed concern. The noble Baroness, Lady Hoey, and the noble Lord, Lord Moynihan, have both set out their concerns, which I share because I live in the Isles of Scilly. Although the Minister briefly mentioned the Isle of Wight, the comments made about the difficulty of getting to and from, and living in, the islands—I include Northern Ireland in that—are well known. We have been fighting the Government for years to try and get some benefit for the Isles of Scilly and Isle of Wight, in some kind of support for transport—which is ships, of course. Although the Scottish Government were clever in sticking with what they have, we have so far failed.

Some noble Lords may say, “Well, you’re talking about little baby ferries”—those that go across to the islands I mentioned—whereas this order is at the moment limited to 5,000 tonnes. That is true, and none of the ships that go to the Isles of Scilly, except cruise ships, weigh more than that. However, we are also told by many, and I am sure it is true, that when the European Union reviews all these related regulations it will wish to reduce the limit from 5,000 tonnes to much less, so that could affect the freight and passenger ships to the Isle of Wight and the Isles of Scilly. Let us be clear that, at the moment, the costs of services to these islands are very high. The cost of freight to the Isles of Scilly probably means that it comes out at about four times what you would be paying on the mainland for a bag of cement or a tin of baked beans. It is very serious.

The second issue I have with this draft regulation is the timing, as my noble colleague has just mentioned. The timing is quite serious if we are to come up with some alternative means of propulsion. It is fine to say that they can all be electric, and electric ships exist—but not everywhere. In parallel to electric ships, you need a lot of power to ports, but, at the moment, we seem to have a shortage of power. We have had many debates here about the high-power demands for AI, railways, buses and everything else like that. To say that ports must have enough power available to service all the ships that are going to come in in two or three months is cloud-cuckoo-land. We are talking just about ferries—nice though it is to talk about ferries to Ireland. Cruise ships have also been mentioned, as have general cargo and container ships. All kinds of different craft that could reach the 5,000 tonnes or less in the future need to know what the future limits are going to be and to assess what they will do in terms of rebuilding, refitting, or whatever.

I conclude by asking my noble friend the Minister what information has been given to the industry about the need for and the availability of shore power. I also ask him whether he thinks it would be a good idea to ring-fence some of the shore power availability to some of the bigger ports, and whether there is enough generating capacity. I hope my noble friend will be able to tell me that.

I support other noble Lords who suggest that this regulation should be delayed until we have much better proof of alignment with the EU and are given a much longer-term feed-in notice so that the industry, be it ports, shipping lines or anyone else, can adapt and avoid being fined, because that is not what we want for this business. I hope also that we can continue to have a good debate and get some exemptions for Northern Ireland, which I fully support, and for the Isles of Scilly and the Isle of Wight.

[Lord Ashcombe (Con)]

My Lords, we have heard from the noble Baroness, Lady Hoey, my noble friend Lord Moynihan and from other noble Lords regarding the situation facing Northern Ireland’s ferry services and the shenanigans that are certainly coming to light today. Having been raised in the Republic of Ireland, I well remember our reliance on maritime trade to keep the country supplied. I therefore appreciate the pressures described today and suspect those pressures have only intensified in the current era.

I want to turn my attention to a rather smaller stretch of water, near my home in the New Forest; namely, the ferry routes to the Isle of Wight from Portsmouth, Southampton and Lymington. I have used all three of these depending on whether my journey takes me to the east of the island, to Cowes, or to the west. The distances involved may be only four to 12 miles, depending on the route, but what truly matters is that there is no alternative means of travelling to or from the island. The Government seem to have forgotten—or, dare I say, ignored—the Isle of Wight.

As a result, the Isle of Wight will face immediate and disproportionate impacts from the proposed extension to the emissions trading system to domestic maritime vessels of 5,000 gross tonnes and above. The Government’s final-stage impact assessment argues:

“Expanding the UK ETS to include domestic maritime emissions is critical for maintaining regulatory alignment with the EU ETS … Without coverage, UK operators could gain a competitive advantage over EU counterparts, creating market distortions and increasing the risk of carbon leakage”.


There are no foreign vessels trading between the south coast of England and the Isle of Wight, nor between the mainland and the Scottish islands. It is therefore difficult to see how exempting UK domestic island services would in any way undermine the relationship with the EU.

The Isle of Wight has a population of about 142,000—higher in summer as tourism swells the numbers. The island is wholly dependent on its ferries for passenger travel, as well as for the movement of freight, being fuel, food and essential goods, and exporting fresh produce. These services are part of the island’s critical national infrastructure.

--- Later in debate ---

There is also the question of whether the activities that are taking place in Scotland—

[Lord Ashcombe (Con)]

We have a problem with the Isle of Wight. One of the vessels has done everything that it could possibly do to decarbonise. It has no option to go anywhere else because the power is not there. It is a fully hybrid boat, as the noble Lord, Lord Greenway, pointed out with a great deal more technical ability than I have. These vessels cannot go anywhere else, so this is a straight tax that will end up primarily on the residents of the Isle of Wight.

[Lord Whitehead (Lab)]

The noble Lord makes a strong point about the power supply to the Isle of Wight. This is also the case with some other ports. Other noble Lords have said this in their interventions, including the noble Lord, Lord Greenway, for whom I have a great deal of respect and admiration, through our long relationship with the Maritime and Ports Group in another place. He speaks with great authority and considerable knowledge and wisdom on this subject.

Shore power and an electrical supply to ports to enable decarbonisation to take place is a serious question. Both the port of Portsmouth and, in parallel, the port of Southampton suffer from particular cable connections from the substations in their area, which could, at a sub-national grid level, provide sufficient shore power and power for the electrical hybrid ships that may visit these ports. That can be effected by what is called a reopener of the arrangements for distributed network operations to ensure that this power can come forward at an early date. This is what Southampton has done. The power is likely to be forthcoming long before the 2037 date that the noble Lord mentioned. If Portsmouth has not done this yet, I would suggest that it does so. The power is there and readily available to get to the ports. It is a question of putting it in early, rather than later, to make sure that this transition can take place. That is part of a wider problem about grids and grid power in the country as a whole, which this Government are addressing urgently to make sure that we have the power to get ourselves across the transition in the way that we want.

Because of the time available, I will have to address some of the issues by writing to a number of Peers. In this debate, I want to emphasise that this is not a conspiracy to do anybody down or to try to isolate particular communities. Nor is it aimed at undermining the economic prosperity of the country. It is a decarbonisation measure that has to happen as part of our general decarbonisation route to net zero. It would be anomalous if the maritime sector were to be excluded from that decarbonisation route and if we were not to take measures, which I have known about for a long while, to make sure that that decarbonisation route is as effective as it can be in how it aligns with the EU ETS and eventually with the CBAM process. At present there is some problem of alignment because the EU CBAM process is proceeding earlier than the UK CBAM process. These need to be aligned in the longer term. As has been mentioned in this debate, the prize for that alignment is a substantial bonus for UK trade—£9 billion or so over a longer period. It would be remiss of this Government if they did not have that largely in view in what they are undertaking as far as this SI is concerned. Indeed, the Government do have this in view.

I can certainly say to noble Lords that the effect of this SI will be seriously reviewed in 2028. It is likely that, should everything come into proper alignment with CBAM and the EU, some of those shorter-term exemptions and changes will come jointly into alignment for the net benefit of everybody, including Northern Ireland, the Republic of Ireland and the UK. That alignment will mean a joint overall benefit all round.