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

Lord Greenway Excerpts

Thursday 12th March 2026 Lords Chamber

The company is caught between a rock and a hard place. It cannot electrify its fleet because the grid cannot support it; it has invested in hybrid technology and seeks to do more yet is, in effect, penalised for doing the right thing. The only practical remedy is to exempt these essential UK ferry services from the emissions trading system. If Scotland can do it for its island routes, and Portugal can do it for Madeira—a distance of some 6,000 miles—England can and should do likewise for the Isle of Wight and Northern Ireland. Such an exemption would protect the economy of the Isle of Wight, support its residents and prevent yet another cost being imposed on companies and individuals by this Government since their election in 2024.

[Lord Greenway (CB)]

My Lords, following on from the noble Lord who has just spoken, it is my understanding that the new ferry on the Isle of Wight service which he mentioned has considerable battery capacity. During her voyages, those batteries can be charged, allowing her to operate without shore power when she is in port. She is an advanced ship, one of the first in this country.

The noble Lord has very well covered the Isle of Wight scene. Given the Government’s slavish following of the EU, I find it strange that the EU can derogate ferry services to islands until 2030 but we are not doing the same. Why not? It would save a lot of the problems we are discussing today. It would also give ferry companies more time to invest more in decarbonising their vessels.

I am not going to mention Northern Ireland, because I think that it has been covered very well. I would just like to say a few words about the emissions trading scheme, which seems rather a vague thing. Nobody ever mentions it; we do not hear anything about it. I only learned yesterday that there have been some problems with it—some malpractices, one might say. I do not know whether the Minister is aware of that, but it is something that we should take into consideration.

Traditionally, maritime regulation has come from the International Maritime Organization, based across the river. People think that shipping has not taken much notice of reducing emissions, but huge strides have been made and millions, in fact billions, of pounds have been spent. The main container operators are hedging their bets because there is no silver bullet to replace the internal combustion engine, so they are producing hybrid vessels that can run on normal diesel fuel, liquefied natural gas or methanol. Companies are also looking at ammonia. In the smaller fields, especially Norway, which has been very advanced in this area, there are electric ferries and hydrogen ferries. In order to cut down their emissions, the shipping companies are looking at all ways of reducing fuel use, even going back to wind—modern computerised sails, 100 feet high, can help to reduce fuel costs considerably with the right conditions.

Likewise—this is the only mention of Northern Ireland that I will make—somebody might have noticed a ship with something that looks like an old-fashioned factory chimney sticking up in the air. A German invention of the 1920s called the Flettner rotor has been resurrected. It is a rotating cylinder that has high pressure on one side and low pressure on the other and produces force to drive something. Bulk carriers up to 400,000 tonnes can have five of these things. At over 100 feet high, they can fold down when the vessel is working in port. They are coming into increasing use. The maritime industry has not been standing still. I heartily agree with the comments that the funds—call it a tax, if you like—gained from this system should be ploughed back into the industry and not disappear into the maws of the Treasury.

As regards shore power, which the noble Lord, Lord Berkeley, mentioned, we certainly have three ports that have it—Aberdeen, Portsmouth and Southampton—and the Government have been assisting with the UK SHORE unit, which has considerable funds available. A scheme has been put into operation in Portsmouth. The Government put in £20 million and I think that the local authority put in another £5 million. What happened? The two French ferries that use the port will not use it. Why? Because the cost of electricity is too high in this country. If that is not shooting yourself in the foot, I do not know what is. Certainly, there are many other ports looking into this. Take Dover-Calais, one of the major ferry routes in this country. Calais has already committed to funding three berths by 2030 and Dover is looking to form a partnership to try to do something similar. But I think Dover, as a trust port, has a problem in that it has to have an Act of Parliament to be able to deal with electricity.

Cruise ships have been mentioned. There are two berths in Southampton, but only one can be used at a time because of lack of capacity in the grid. The real problem, as I see it, is that we have to increase capacity in the grid. The Minister might be able to tell us that some things are beginning to take place, but I would have thought that, before investing billions in offshore wind, it would have been more sensible to have upgraded the grid, which would have avoided a lot of these problems.

This could well be the last time that I address your Lordships, as I shall be leaving shortly, so I would like to add my regret on another matter. I have been talking on maritime matters for over 50 years in this House. When I came in, we had a very sizeable merchant fleet and a sizeable Navy. What do we have today? In terms of trading vessels, we are number 31 or 32 in the world. That is a great regret and an utter disgrace.

[Lord Weir of Ballyholme (DUP)]

My Lords, it is an honour and a privilege to follow the noble Lord in what may be his valedictory speech. It is perhaps a little disappointing that it was on this SI, which seems to have been based on false premises. A range of factors that were not available in the other place were introduced only at a late stage. Also, it has been sold on the grounds of the consent of the devolved institutions. Where consent is obtained through duress and blackmail, as we have heard detailed today, how genuine is it?

It is clear that this SI will be deeply detrimental to the ferry companies. Even at this late stage, they have not been given all the technical information that they need to implement it in full. They have been given a six-month window to introduce and implement it, when even the EU gave a three-year period for introduction and implementation for a similar scheme.

The SI is deeply disproportionate. Domestic ferries account for around 1% of the UK’s carbon footprint and, as outlined by the noble Baroness, Lady Hoey, and others, we are not even in a position to take action immediately to counteract that 1%. But this clearly goes beyond the implications for ferry companies. There are implications for passengers, haulage companies and companies in Northern Ireland and the Isle of Wight—and companies in Great Britain looking to send their goods there—because, inevitably, the only way this can be dealt with is to pass those costs on to the consumer and the companies concerned.

As the noble Baroness, Lady Hoey, highlighted, Northern Ireland relies on 90% of its goods coming in and out by ferry. That is not simply a convenient choice; it is a necessity. Let me give an example from my own life—I think the term in vogue today is “lived experience”. In the last two years, I have on two occasions had to get my electric wheelchair sent back to the manufacturer for adjustments. It happened once in London and once in Belfast. In London, I could get the wheelchair to the manufacturer in Birmingham; I could have arranged for it to be picked up or got a car to take it there. As it happens, I brought it there by train. In Northern Ireland, there was no such alternative. The only opportunity that I had was to ship it by freight to Birmingham. I suppose that I could have tried driving it there, but I would have got a little wet in the meantime. The reality is that that is the level of dependence we have.

This could not come at a worse time. Because of the conflict in the Middle East, we are faced with rising fuel and transport costs and a clear knock-on effect on the cost of living, with inflation set to increase. To be fair to the Government, they will say that those are all factors outside their control. But this measure is a self-inflicted wound on top of all those factors, which will impact different parts of this United Kingdom disproportionately. We are sometimes, somewhat erroneously, referred to as an island nation. That is not accurate. We are a nation of islands. There is rightly an exemption of 100% for the Scottish islands, but to have only a 50% exemption for Northern Ireland and similar problems for the Isle of Wight is not treating all parts of the United Kingdom fairly.

I had a number of questions, nearly all of which were covered by my noble friend Lord Dodds, but I will add one. There is widespread concern that there has not been much specific assessment of the economic impact on Northern Ireland. Will the Government give a commitment today that when they review the trading scheme in 2028 there will be a Northern Ireland-specific economic impact assessment? Many of us fear this will add to an already difficult situation for many companies and many consumers in Northern Ireland. The Government must face up to that.