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

Lord Whitehead Excerpts

Monday 29th June 2026 Lords Chamber

Moved by

[Lord Whitehead]

That the draft Regulations laid before the House on 14 April be approved.

Relevant document: 58th Report from the Secondary Legislation Scrutiny Committee, Session 2024–26

[The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)]

My Lords, I thank the House for its consideration. The draft Climate Change Act 2008 (International Aviation and International Shipping) Regulations 2026 were laid before the House on 14 April.

This instrument makes the necessary regulations under the Climate Change Act to include emissions from the UK share of international aviation and shipping in the sixth carbon budget, all subsequent carbon budgets and the 2050 net-zero target. It formalises the Government’s long-standing planning assumption that the sixth carbon budget, starting in 2033, will be the first to include emissions from the UK share of international aviation and shipping. This has been the position of successive Governments. In 2021, the previous Government set the sixth carbon budget, factoring in the UK’s share of international aviation and international shipping. It also reflects the advice of the independent Climate Change Committee.

This debate is not about whether we take action in these sectors—we already are. The Government are committed to ensuring that long-term growth in the aviation and shipping sectors is compatible with our climate obligations. We have been working multilaterally to reduce aviation and shipping emissions within the International Civil Aviation Organization and the International Maritime Organization. We are now formally reflecting this effort in our domestic legal framework.

For earlier carbon budget periods, international aviation and shipping were not formally included in our legally binding targets. Instead, we left headroom, setting tighter limits for other sectors in order to deal with the assumptions of being in those targets in general. We are now revising this approach by legislating to formally include these emissions in the overall emissions limit from the sixth carbon budget onwards.

Accounting for international aviation and shipping emissions within the formal framework is clearer and more flexible than accounting for them outside the framework. It allows the Government to choose the best overall pathway to meeting our targets. For example, if progress in reducing aviation emissions is faster than expected, it will make it easier to meet our targets overall. Equally, faster progress in other sectors could allow more flexibility for international aviation and shipping.

Although aviation is a hard to decarbonise sector, we are already taking great strides towards greener aviation. This includes implementing the sustainable aviation fuel mandate last year, providing a further £219 million to scale up SAF production through to 2030, and up to £2.3 billion over 10 years for the Aerospace Technology Institute to support the development of more efficient and zero-emission aircraft technologies. We are also driving cost-effective decarbonisation through carbon pricing mechanisms, including the UK emissions trading scheme, or UK ETS, and the global offsetting scheme, CORSIA.

We are also committed to decarbonising shipping through the UK maritime decarbonisation strategy, investment in clean maritime technologies and support for low-carbon fuels. The UK is proud of our leadership at the International Maritime Organization, ensuring the sector contributes fully to our net-zero ambitions while maintaining the UK’s competitiveness as a global maritime nation.

To note, this statutory instrument does not alter the stringency of the UK’s climate targets, introduce new sector-specific limits or set new policy requirements for the aviation or shipping industry, and nor does it alter the climate considerations in the draft Heathrow expansion national policy statement. What it does provide is legal clarity—something colleagues in the Environmental Audit Committee and the Transport Select Committee have called for repeatedly. Successive Governments have pledged to legislate for this change as soon as parliamentary time allows; now we are keeping our word.

I recognise the amendment tabled by the noble Lord, Lord Moynihan, for discussion today. The noble Lord raises two points of concern, which I shall address in turn. First, the noble Lord regrets that the draft legislation does not define a methodology for accounting for the UK’s share of international aviation and shipping emissions for the purposes of carbon budgets. That omission is for good reason. Not prescribing a specific methodology now allows for continued methodological development in the period before the sixth carbon budget period commences—that is, in 2033. That will be in line with developments in international carbon reporting practice, in which the UK participates in ongoing discussions. That has to be an international discussion with the international agencies responsible for getting that right on an international scale. I am sure that the noble Lord would not wish to tie the Government to an outdated methodology, out of sync with wider international practice. It is not that there is no methodology; it is a question of making sure that the final methodology is fit for purpose when the sixth carbon budget comes in.

That final methodology will be determined separately by the Secretary of State before laying the first annual statement of UK emissions for the sixth carbon budget period. In the meantime, I refer the noble Lord to the technical annex of the Government’s carbon budget and growth delivery plan, which sets out the Government’s working assumption on defining a UK share of international aviation and international shipping emissions when setting and making policies for future carbon budgets. If the noble Lord wants to cut to the chase early, I suggest that he refers to paragraphs 125 and 126 of the technical annex to do just that.

Secondly, the noble Lord suggests that the regulations will place additional costs on industry. As I noted earlier, this is an accounting change that clarifies how emissions are counted within UK targets; it does not set new policies for international aviation and shipping. The Government will continue developing policies to reduce emissions in international aviation and international shipping, and these will be subject to their own assessments.

Notwithstanding that, I emphasise that the Government are acutely aware of the importance of international aviation and international shipping to UK economic growth. We are committed to pursuing solutions that do not risk displacing emissions to elsewhere in the world or damaging UK competitiveness, working closely with industry to ensure that our high climate ambition is deliverable and affordable for them and passengers. Indeed, schemes such as the sustainable aviation fuel mandate are carefully designed to protect against excessive cost increases. At the same time, measures such as the Sustainable Aviation Fuel Act and grant funding will tackle barriers to investment and support UK manufacturers to gain a share of the growing global advanced fuels industry, with all the economic benefits that entails.

I urge noble Lords to consider these points when and if they consider voting in favour of the amendment tabled by the noble Lord. The measures formalise an approach supported by successive Governments and reinforce the credibility of the Government’s strategy for aviation and shipping decarbonisation, both domestically and internationally. I beg to move.

--- Later in debate ---

[Lord Whitehead (Lab)]

My Lords, I thank all noble Lords for their valuable contributions to the debate. I am greatly buoyed up by the tremendous speeches in support of this measure. It has restored my faith that this House is facing the right way on climate change and is behind measures to tackle climate change and get us to net zero. That is great.

In that respect, I recognise that I was gently chided by the noble Baroness, Lady Hayman, for being rather proceduralist in my first comments. I would like to put that right now by saying hurrah! We now have this on the statute book. It is something that the noble Lords, Lord Teverson and Lord Deben, and many others—including me—have been banging on about for many years. It always seemed that it was a terrible gap in our armoury to fight climate change that we were apparently allowing international aviation and international shipping to have a free pass as far as climate change contributions were concerned. In those days, it was partly because people could not think of how to do it easily.

The noble Baroness, Lady Bloomfield, underlined the point that we are not discussing methodology because we cannot think of what to do but because there is a still emerging and developing consensus across the world in the negotiations with the international aviation authority and the International Maritime Organization on exactly how this can best be done—not that it cannot be done, but to get it right.

As far as aviation is concerned, it is a question of getting a point-to-point arrangement, where your contributions are relevant for the outward flight and someone else’s contributions are available for the flight back. How to establish the point-to-point arrangement internationally and make it work within each country that agrees it is part of the discussion that is going on with the international aviation authority.

As far as shipping is concerned—and this is relevant to the contribution made by the noble Baroness, Lady Foster—we are now talking about international shipping coming into climate change arrangements. Obviously, domestic shipping has been in there for a while. The noble Baroness and I were engaged in an interesting discussion just recently about exactly how Northern Ireland gets treated as far as domestic shipping is concerned and the particular circumstances for Northern Ireland. As the noble Baroness said, they have led to a half-price arrangement for Northern Ireland shipping so that it is not disadvantaged compared with Republic of Ireland shipping.

There are things already that can be put into place in terms of taking account of particular circumstances. But the particular thing that has to be taken account of as far as international shipping is concerned is the fact that ships do not go to one place and then back to another place; they go to multiple places around the world. So how do you get a fair arrangement for what international shipping is paying in? You go through international bunkering arrangements and things such as that, but there is still some work to do in getting that absolutely right.

It is right that we do not put something down now on a statutory instrument and that we make sure, along with our international partners, that we have got this right on an international basis. This has to be done on an international basis to make sure that people do not escape or get out of their obligations and that it is fair to people all round. That demonstrates that this is clearly not a wrecking ball to UK industry. Indeed, as the noble Lord, Lord Deben, mentioned, if it was a wrecking ball, it would have been a wrecking ball firmly in the middle of the last Conservative Government’s arrangements for the economy, because that is what they did at the time.

It is not a wrecking ball because it will be fair to everybody. This will be the basis on which international aviation and international shipping will continue. There will not be people who get a free ride on the back of it. It will be fair shares for everybody. That is why it is important that we get the methodology right.

I do not think I need to go on a great deal about the rest of this SI, because noble Lords have made such a good case for it this evening and I do not need to add to it. If I have missed anything out in my contributions, I will write to the relevant noble Lords.

I do not agree that ETS is a method of tax raising. It is in the form of a tax, but it works with the market rather than against it to distribute properly how those contributions can be raised. It makes the cost of high-carbon activities higher than that of low-carbon activities—that is one of its purposes. However, it is not unfair taxation for particular groups of people or economies; it is a fair, market-based method of ensuring that the move towards a low-carbon economy is distributed among all people.

This measure should be passed by consensus among everybody in this Chamber. It is so important that that consensus is maintained. It was embedded in the Climate Change Act originally and has provided stability, certainty and credibility to our framework. These regulations do not raise our ambition or weaken it but ensure that it is applied consistently. I therefore urge noble Lords to support these regulations and, in doing so, uphold the United Kingdom’s status as a global leader in tackling climate change. Should this matter be put to a vote, I would urge that this Chamber vote solidly against the idea that there should be a regret amendment attached to it.