Shipping emissions incorporated into UK’s Carbon Budget

The UK’s share of international shipping emissions has been incorporated into the country’s Carbon Budget for the first time as part of a wider effort to cut national emissions by 78% by 2035 compared to 1990 levels.

This is the UK’s 6th Carbon Budget which limits the volume of greenhouse gases emitted over a 5-year period from 2033 to 2037. This will take the UK more than three quarters of the way towards reaching net zero by 2050, and is consistent with the Paris Agreement temperature goal to limit global warming to well below 2°C and pursue efforts towards 1.5°C.

The UK government claims that it will set in law the world’s most ambitious climate change target. The move was announced in advance of the UK’s co-hosting of the COP26 Climate Change Conference taking place in Glasgow in November.

Commenting on the news, Mike Simms, BDO’s Head of Shipping said:

“The decision to incorporate the UK’s share of global shipping and aviation emissions into its latest Carbon Budget is hugely significant. It is hoped that this will allow national emissions to be accounted for accurately and consistently.

“There has been some suggestion that the UK’s unilateral move may make it more difficult for the International Maritime Organization to achieve consensus on global emissions reduction when it reviews carbon reduction targets in 2023. We hope that the UK’s approach encourages rather than thwarts ambitions at the global level.

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“There have been some encouraging developments in recent days regarding the industry’s commitment to improving its environmental impact. The call from the International Chamber of Shipping and others for a global tax on emissions to encourage investment in new technology is a sign that the industry is taking its role in helping to combat climate change seriously.

“All eyes will now be on the next IMO meeting in June to see if progress can be made in pushing this agenda forward. We remain hopeful that the UK shipping industry can be a leading player in finding ways to progress the hugely important environmental agenda but also to capitalise on the significant economic opportunities that exist.”


Note to editors

The BDO Shipping & Transport team has extensive experience delivering accountancy, tax and advisory services to the sector worldwide.

BDO delivers key information and insights to the shipping community, including the annual OpCost report, the quarterly Shipping Confidence Survey and a host of thought leadership on topical issues, such as regulatory developments and market conditions.

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Our clients are Britain’s economic engine – ambitious, entrepreneurially-spirited and high-growth businesses that fuel the economy. 

We share our clients’ ambitions and their entrepreneurial mind-set. We have the right combination of global reach, integrity and expertise to help them succeed. 

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Frank Shepherd
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