Net zero aviation and shipping

The impact of conventional aviation activity on climate is still not fully quantifiable. While the contribution of aviation to levels of atmospheric CO and other greenhouse 2 gases is quantifiable and substantial, the climate impact of other emissions from aviation is currently not well understood and difficult to quantify. Measures to decarbonise the sector are vital: but removing carbon dioxide from aviation activity is unlikely to eliminate its overall impact on the environment. The Government has acknowledged the contribution of non-CO2 effects from aviation in the development of its strategy for decarbonising aviation, and is examining methods of mitigating non-CO2 effects from aviation which uses fuels which have a reduced carbon footprint.

We consider that any strategy designed to reduce the impact of UK aviation activity on global warming ought to encompass the environmental effects of aviation in their entirety. We therefore recommend that the Government actively commission, promote and support research into the total environmental effects of aviation, with a view to incorporating the emerging consensus into all future iterations of its strategy for net zero aviation. (Paragraph 31) Aviation emissions in the UK’s carbon budgets

The Government’s decision to include international aviation emissions in the UK’s budgets with effect from the Sixth Carbon Budget has sent a very positive signal about the UK’s resolve to address carbon emissions from UK aviation by the use of policy instruments. Establishing a requirement to bring aviation emissions within the Sixth Carbon Budget target by 2037, rather than leaving budgetary headroom for them as in previous budgets, removes ambiguities around the issue and obliges the Government to address the complexities around accounting for the UK’s share of international aviation emissions.

We are nevertheless concerned that legislation to give effect to this commitment has not been brought forward for approval by Parliament, over two and a half years since the commitment was originally made and over two years since the Government promised to legislate “within twelve months”.

We recommend that the Government lay before Parliament for approval, without further delay, a draft statutory instrument under section 30 of the Climate Change Act 2008 to define the emissions from international aviation and international shipping which are to be reckoned as emissions from sources in the United Kingdom.

The outputs from the modelling undertaken by the Climate Change Committee, the Government and Sustainable Aviation vary as to the projections of likely emissions reductions from UK aviation by 2050. In some instances these variations are substantial, and tend to reduce overall confidence in the reliability of the projections from each source. (Paragraph 52) Net zero and the UK aviation sector 51

We recommend that the Government work with the Climate Change Committee and Sustainable Aviation on a comparative analysis of the models underpinning the projections for UK aircraft emissions, so as to reach consensus, as far as possible, on the likely impact of measures to be taken by industry and by Government on levels of emissions from UK aviation out to 2050. (Paragraph 53) ‘Jet Zero’—the UK Government’s strategy for net zero aviation

There is evidently significant potential for increased efficiencies across all aviation’s operations which can lead to incremental reductions in CO2 emissions across the UK aviation sector. Efficiencies from fuel use in the current and emergent fleet of aircraft, better use of airspace and reductions in emissions from airport and aviation operations will all have a significant part to play in aviation’s contribution to reaching net zero.

We agree with the Climate Change Committee that the 0.5% year-on-year improvement in fuel efficiency from the aircraft fleet requires considerable effort both in research and development activity and in incentivising the industry to renew existing aircraft fleets.

We recommend that the Government sustain and enhance its engagement with the aviation industry on the delivery of operational efficiencies from current and future fleets of aircraft operating through the UK, to maintain the ambition to secure 2% year- on-year CO2 emissions reductions from fuel and operational efficiencies. The delivery of these reductions must be rigorously monitored against an established baseline: should the rate of progress in reductions fall behind 2%, the potential contribution of system efficiencies to meeting the 2050 net zero target must be urgently reassessed.

We recommend that the Department for Transport and the Civil Aviation Authority intensify their work on airspace modernisation, bearing in mind the overarching principle of environmental sustainability.

We support the Government’s aim to secure net zero in UK airport operations by

Sustainable aviation fuels may offer a means of reducing the carbon emissions attributable to the lifecycle of aviation kerosene from its production to its combustion, and the Government envisions a substantial role for SAFs. There is nevertheless potential for wide variability in lifecycle emissions across the general class of fuels which the industry currently terms ‘sustainable aviation fuels’. We note that the Climate Change Committee warned in its 2023 Progress Report to Parliament that the Jet Zero Strategy approach is “high risk due to its reliance on nascent technology”, such as the rapid uptake of these fuels. (Paragraph 109) 52 Net zero and the UK aviation sector

We welcome the initiatives taken by the Government to date to establish a domestic industry for the manufacture of sustainable aviation fuels, and the steps it is taking to build long-term supply chains for domestic and international aviation. We note the measures announced to date on the establishment in 2025 of a mandate for SAF use. We will monitor the outcome of the Government’s second consultation on the issue and the drafting of the secondary legislation required to implement the mandate.

We are concerned that the broad definition of what is currently considered a sustainable fuel, and the absence of a global standard for SAFs, may lead to the development of aviation fuels which cannot credibly be described as sustainable. We recommend that the Government take every opportunity to establish in its policy instruments for a UK SAF industry the strongest safeguards to ensure significant lifecycle emissions savings from the use of SAFs developed in the UK.

We note with approval the Government’s criteria restricting the feedstocks to be used in UK-manufactured SAF and specifying that feedstocks are not to be obtained from land with high biodiversity value or land with high carbon stocks. We recommend that in its forthcoming Land Use Strategy the Government establish clear and unambiguous criteria as to the type of land which is to be allocated to growing feedstocks for SAF. The Government must also take every opportunity in international forums to press for the highest standards of sustainability in the production of SAF feedstocks.

We further recommend that Ministers and officials work vigorously at the ICAO and in all other relevant international bodies for the establishment of a global regulatory standard for SAFs which is comprehensive and rigorous.

We welcome the establishment of an UK SAF Clearing House at the University of Sheffield to support SAF producers through the process of certification and approval of their products for commercial use.

The Government must match its ambition for the development of a domestic SAF industry with an appropriate appetite for risk and innovation in order to ensure that commercial production of truly sustainable fuels develops at pace. The introduction of a revenue certainty mechanism, via provision in the Energy Act 2023, represents a welcome initial step in this process. To this end, we recommend that the Government make swift progress on the implementation of a price support mechanism to incentivise investment for SAF production pathways.

Zero-emission flight represents a very promising long-term prospect for achieving reductions in the CO2 emissions from UK aviation. Unlike the use of SAF, zero- emission flight technologies hold out the promise of eliminating the carbon emissions entailed in aircraft movements. We are encouraged by the significant contributions to research and development in this sector which are being undertaken by UK-based firms supported by the Government and industry through the Aviation Technology Institute.

While zero-emission flight technologies offer a route to significant reductions in aviation’s CO2 emissions, their deployment is realistically likely to be limited to short-haul flights for the foreseeable future. ZEF can play a significant role in Net zero and the UK aviation sector 53 promoting aviation as a means of connecting the UK, particularly on public service obligation routes between the UK mainland and island communities. We recommend that the Government establish a target under the Jet Zero Strategy for the full roll-out of zero-emission aircraft on a minimum number of routes essential to UK connectivity by 2040, with a view to encouraging the greater takeup of ZEF aircraft on commercially-operated short haul routes within the UK.

Zero-emission flight is sometimes described as providing ‘guilt-free’ flying. While it is the case that ZEF technologies remove the CO2 emissions from conventional aircraft movements which are aviation’s most damaging effect on the environment, the potential effects on the atmosphere from both hydrogen and battery-electric flight are not fully known. We recommend that the Government, when promoting research into the non-CO2 effects of aviation, include in its strategy the funding of research into the effects on the atmosphere and climate of aircraft using zero-emission flight technologies.

Requiring airlines to set a price on their emissions, and purchase credits for these emissions through a trading scheme, can be a constructive mechanism to ensure that the carbon cost of aviation is more adequately reflected in the cost to the consumer. This in itself may influence consumer demand for flights, depending on the availability and cost of the necessary carbon credits. Sustainable Aviation has categorised market-based measures as demand management mechanisms.

We welcome the decision of the UK Government and devolved administrations to end the issuing of free ETS allocations to aviation with effect from the 2026–2030 allocation period. We note that the use of SAF in aviation is currently zero-rated for ETS, even though the emissions from burning SAF in flight are currently equivalent to those from burning aviation kerosene: as the SAF market matures, consideration must be given to pricing SAF in the ETS at a level which genuinely reflects its carbon impact.

We recommend that the Government implement its proposed changes to the UK ETS so as to remove conventional aviation fuel from free allocations, and that it consult on a methodology to include SAF in the ETS in a way which does not inhibit the development and use of SAF in UK aviation.

Offsetting mechanisms, such as CORSIA, may provide an interim step towards contributing to the removal from the atmosphere of the emissions attributable to UK aviation. We commend the Government on the work it has already undertaken at international level to secure an agreement on an international offsetting mechanism. More remains to be done, and the use of offsets to address aviation emissions is at best a stopgap measure until more effective and high-quality technologies to achieve permanent greenhouse gas removals are available. (Paragraph 161) 54 Net zero and the UK aviation sector Closing the aviation emissions gap

Aviation is a sector of the economy where emissions are recognised to be some of the hardest to abate. Under all the scenarios presented for the reduction in emissions from UK domestic and international aviation, it is recognised that there will be residual emissions which will have to be addressed by other means in order for the UK economy to reach net zero by 2050.

There is considerable dispute over the desirability of policy measures which would reduce UK aviation emissions by reducing the demand for aviation services. The Climate Change Committee has been clear that demand management is the most effective way of reducing aviation CO2 and non-CO2 emissions, and whilst there are a number of different approaches available for consideration, they have not been subject to formal modelling in the Jet Zero Strategy policy framework.

We note that UK Ministers have so far ruled out the inclusion of active demand management measures in the Jet Zero Strategy in preference for a policy which promotes the growth of the airline industry following the pandemic. This is beyond the approach proposed by the Climate Change Committee. Although the Jet Zero Strategy commits to 70% passenger demand growth by 2050 on 2018 levels, the CCC’s Balanced Pathway for the Sixth Carbon Budget recommends a 25% demand increase over the same period.

While the Jet Zero Strategy contains measures to influence consumers towards more sustainable choices, and includes carbon pricing measures which will have an indirect effect on demand, it does not include any policy instruments designed to discourage flying in favour of other modes of travel or of communication. Ministers appear confident that the package of measures in the Strategy can achieve the reductions in emissions required from UK aviation, with the residual emissions accounted for by negative emissions technologies.

While we note the ambition shown by the Government and by the aviation industry in proposing technological methods to reduce aviation emissions, we recognise the very significant challenges for the industry in delivering the required reductions, and note that any additional costs associated with carbon reduction, such as carbon pricing through ETS and Corsia schemes, unless fully absorbed by the sector, could reflected in ticket prices and may have further impacts on overall demand. Further such costs on the sector which limit demand may run the risk of stifling the innovation that the Government and industry strategies rely on, and may skew the international aviation market in favour of more polluting airlines in a way that the multilateral ETS and Corsia schemes are designed to avoid.

We recognise that the Government’s decision, while consistent with a policy of promoting the UK aviation industry, carries a degree of risk. In order to deliver the emissions reductions foreseen, the high ambition scenario in the Jet Zero Strategy needs to be followed through with vigour and conviction and needs to be given the appropriate priority for delivery. Failure to follow through on the ambitions expressed will result in the UK falling behind in its delivery of emissions reductions, Net zero and the UK aviation sector 55 leaving other sectors to pick up the slack. Even if the Government maintains its high ambition, there is a risk that the aviation sector will not fulfil the confident predictions it has made for emissions reductions.

The Climate Change Committee has argued that demand-side measures have an important role to play in ensuring that the aviation sector delivers the necessary emissions reductions and that risks in the current approach are mitigated. That Committee has therefore urged the Government to “develop a suite of policy and technology options” to address aviation demand.

Ministers have committed to five-yearly reviews of progress against the Jet Zero Strategy’s targets, and have undertaken to take action to amend policy if it appears to be necessary. On the current timetable the first such review is to take place in 2027. This appears to us to be a relaxed timetable for policy review at what is a critical stage for an incipient policy. If a review in 2027 concludes that targets are unlikely to be met, the ensuing policy changes will only bear fruit in the early 2030s—arguably too late for the emissions reductions initially envisaged to be achieved.

We recommend that an initial review of the Jet Zero Strategy and the modelling underlying its ‘high ambition’ scenario be undertaken no later than the end of 2025, with a view to determining whether the Strategy remains on track to meet the interim emissions reductions projected for 2030 and 2040 as well as the overall reductions projected for 2050.

The review should be undertaken with the active engagement of the UK aviation sector, which is principally responsible for delivering the reductions in emissions it has claimed are possible: any shortfalls in delivery ought to be reviewed and urgently remedied.

Should the evidence of the review indicate that technological measures alone will not deliver the emissions reductions predicted, we recommend that Ministers reconsider the role of demand management measures in aviation emissions policy. In preparation for the outcome of that review, we recommend that the Government develop policy proposals on demand reduction, including consideration of greater use of digital technologies, reducing the cost of rail travel, and a frequent flyer levy, should these then be required. (Paragraph 203) 56 Net zero and the UK aviation sector

We welcome the International Maritime Organization’s adoption in 2023 of a revised Greenhouse Gas Strategy and the clearer signals it provides to IMO States and the shipping industry on the pathway to achieving net zero ambitions from shipping by 2050.

The UK’s influence over and contribution to international shipping activity is considerable. We commend the UK Government on its contribution to date in securing a global strategy which is far more ambitious than that initially adopted by the IMO in 2018.

We nevertheless observe that the strategy adopted by the IMO does not currently align with a pathway consistent with the Paris Agreement target of limiting global warming to 1.5°C, and that its ambition is limited to achieving net zero emissions “by or around” 2050.

The period to 2028 and the expected adoption of a further GHG Strategy will be a crucial one for international shipping emissions, as agreement is reached on regulatory measures to implement the 2023 Strategy and as IMO States seek consensus on further decarbonisation plans. The outcome of discussions at the 81st meeting of the IMO Marine Environment Protection Committee in March 2024 appears to have been positive, but work is clearly required to consolidate and raise IMO ambitions on global emissions regulation. Continuity in the UK Government’s approach and the maintenance and strengthening of the coalition of ambition at the IMO is essential.

We recommend that the Government continue to work at the IMO for adoption of effective regulatory measures to implement the 2023 Strategy. In tandem with this, Ministers must press for a 2028 Greenhouse Gas Strategy which consolidates the ambition of the 2023 Strategy while striving for reductions in line with the UK Government’s stated goal of absolute zero emissions from international shipping by

Prompt and effective implementation of IMO conventions will be essential to the delivery of meaningful reductions in shipping emissions in line with Paris goals and national net zero pathways. We therefore urge the UK to work with those flag States with substantial shipping registries to ensure full and thorough implementation of IMO conventions on maritime GHG reductions, supporting capacity-building where necessary. (Paragraph 49) The UK Government’s approach to delivering net zero shipping

The current method for allocating international shipping emissions between states appears unsustainable as a basis for making UK policy on international shipping emissions and determining the maximum emissions permissible from the UK’s international shipping in the Sixth Carbon Budget. The International Maritime 58 Net zero and UK shipping Organization has already moved away from the bunker sales measure to a voyage- based measure. This appears to give a more accurate picture of the overall contribution of international shipping activity to GHG emissions worldwide.

We recommend that the Government urgently assess the merits of introducing a voyage- based measure of the UK’s contribution to international shipping emissions, so as to provide a sounder basis for developing policy on reducing that contribution. It is in the interests of the industry and policymakers alike that the matter is swiftly clarified, and that the legislation to include international aviation and shipping emissions in the Sixth Carbon Budget is brought before Parliament for approval without further delay.

We welcome the Government’s initiative to establish UK SHORE as a dedicated unit to promote research into green maritime technology and the reduction of emissions from UK shipping. We are nevertheless concerned to note that no specific objectives or targets have been set for the unit, and are alarmed to learn that the Department for Transport is unable to guarantee the unit’s funding beyond the end of the current Spending Review period in March 2025. It is worrying to note the slippage in policy on clean maritime clusters and zero-emission fuels and the provision of shore power in ports. At this stage of the Government’s strategy to achieve net zero from UK shipping, Ministers must ensure that the sector has certainty about policy direction.

Net zero offers the UK an unrivalled opportunity to secure benefits for the UK maritime sector and the UK’s research and manufacturing base. It is now high time for Ministers to advance to the next stage of policy development by setting stretching but achievable interim targets for UK domestic and international shipping emissions, consistent with carbon budget requirements and the overall 2050 net zero target. (Paragraph 95) Technical measures to decarbonise shipping: renewable marine fuels

The provision of up to £206 million of matching funding for research into low- and zero-emission shipping is to be applauded, and no doubt represents a step change in Government investment in the field. It is, however, dwarfed by the sums of public money committed to research and development into aviation technologies, including low-carbon aviation, since 2013.

The Government’s current refusal to guarantee funding for research and development into maritime decarbonisation beyond March 2025 is regrettable. We note that the Aviation Technology Institute has received a guarantee of funding to 2030, no doubt reflecting the importance to the economy, and to decarbonisation targets, of rapid progress in reducing emissions from domestic and international aviation. By failing to guarantee Government support for research and development into reducing domestic and international shipping emissions, Ministers risk stifling progress in this sector. Although decarbonisation of domestic and international shipping is less advanced than decarbonisation of aviation, it is just as challenging to undertake, and demands significant investment decisions from Government and industry in the short term if net zero goals are to be met. (Paragraph 134) Net zero and UK shipping 59

The Government must send clear and unambiguous signals to the UK maritime sector that it is committed to supporting its transition to net zero. We recommend that Ministers urgently review the funding perspectives for decarbonisation of UK shipping and, no later than the next fiscal event, provide a commitment to further matching funding for research and development to at least 2030.

As with low-carbon aviation fuel, the development of manufacturing capacity for zero-emission marine fuels is vital for the security of the UK’s maritime trade and for the establishment of green shipping corridors. It is disappointing that the Government says it is “not yet able to commit” to the establishment of manufacturing facilities in clean maritime clusters so as to deliver up to 2 TWh of zero-emission marine fuels annually by 2030. Accelerating support for these facilities would bring significant benefits from first mover advantage.

We note with interest the recent modelling undertaken by UMAS and Arup, examining how a domestic clean ammonia facility could significantly benefit the take up of zero-emission maritime fuels for ferries operating across the North Sea from Newcastle, the Tees Estuary and Immingham. This holistic assessment of the business case for new facilities demonstrates a refreshing approach to balancing the challenges and opportunities arising from maritime decarbonisation.

As part of the updated Clean Maritime Plan the Government must develop a strategy to support the development in UK maritime clusters of facilities for the manufacture of zero-emission marine fuels. This strategy must be supported by a delivery plan which sets clear production milestones.

We recommend that Ministers consult on the introduction of a revenue support mechanism to incentivise the commercial production of zero-emission marine fuels in the UK. (Paragraph 139) Technical measures to decarbonise shipping: efficiency improvements

The current Clean Maritime Plan sets no clear or measurable objectives for the UK’s contribution to operational efficiencies from domestic and international shipping.

The refreshed Clean Maritime Plan must set stretching interim targets for the emissions savings to be achieved from operational efficiencies in UK domestic shipping to 2050, together with a detailed plan for how these savings are to be achieved through measures such as route and speed optimisation.

The UK’s influence in international shipping is considerable and extends beyond its prominent position at the IMO. The basis of the majority of international shipping contracts is English law. The UK Hydrographic Office provides unrivalled resources to support vessels in optimising their voyages so as to maximise energy efficiency. This ‘soft power’ is an invaluable resource for the decarbonisation of global shipping. (Paragraph 166) 60 Net zero and UK shipping

We recommend that, as part of the refreshed Clean Maritime Plan, Ministers commission a workstream to examine how the efficiency of international shipping operations can be further optimised by the appropriate development of the expertise in the UK Hydrographic Office.

IMO standards for existing ship efficiency provide progressively more stringent measures to require the existing fleet to reduce its emissions. Current measures have been criticised for a lack of ambition. While the amendments to the MARPOL Convention currently being contemplated at the IMO may further ratchet up efficiency requirements, there are potential emissions benefits to be gained from a more stringent UK approach.

We recommend that Ministers consult on the emissions benefits to be achieved through regulating the maximum carbon intensity of vessels allowed to enter UK ports, with a view to permitting only those vessels rated ‘A’ to ‘C’ for carbon intensity under the current IMO Energy Efficiency Existing Ship index to enter.

It is regrettable that the Government has changed course on its policy on the provision of shore power to UK ports. In a period where grid connections are currently at a premium and demand for electricity supply is increasing, the delay in determining policy on how to provide power to the zero-emission ports of the future is unwelcome.

We recommend that Ministers launch their planned consultation on net zero ports without further delay, so as to gather signals from the ports industry and the wider maritime sector at the earliest opportunity as to what infrastructure is likely to be required to minimise the emissions from ships at berth in UK ports, to provide for bunkering and refuelling with low- or zero-emission fuels and to develop a suitable structure for funding infrastructure development. Ministers must send the clearest signals possible about the likely requirements for port electrification so as to enable early planning for potential grid connections.

The initial Clydebank Declaration, and the consolidation and development of initiatives for green shipping corridors since COP26, represent considerable progress in collaboration between governments, and between the Government and industry, in the practical measures required to make decarbonised shipping a reality. Ministers are to be commended for the initiative in pressing for the Declaration and for subsequent work to develop partnerships to establish these corridors.

The UK, as a leading proponent of this multilateral approach, is demonstrating how green corridors can be implemented on domestic, regional and intercontinental routes. We welcome the recent announcement of collaborations to establish green corridors between the UK, the Netherlands, Norway, Denmark, and Ireland, and we look forward to further positive developments.

In its response to this report we expect Ministers to set out the current state of each of the green corridor feasibility studies UK SHORE is engaged in, and the state of discussions with the USA, Canada, Singapore and other relevant Clydebank signatories on the requirements for implementing bilateral green corridors with each. (Paragraph 188) Net zero and UK shipping 61 Economic measures to decarbonise shipping

We welcome the inclusion of domestic shipping in the UK Emissions Trading Scheme from 2026. We also note the initial decision of the UK ETS Authority not to extend the UK ETS to cover international shipping. The Authority’s position is subject to further consultation.

The Government must press for a global market-based measure for international shipping to be adopted and implemented at IMO level by the end of the current GHG Strategy period in 2028. To avoid ‘double counting’, any IMO measure ought to be drafted so as not to impede the operation of any national or regional economic measures that are equivalent in both scope and ambition to its own global measure. (Paragraph 200) Relaunching the Clean Maritime Plan

The Clean Maritime Plan—the element of the Government’s Maritime 2050 strategy focused on decarbonising shipping—was issued in its initial form in 2019. At the time of publication, it was envisaged that the Plan would be reviewed in 2022. The revision was later deferred to 2023: even on that timetable it is now substantially delayed.

The revised Plan will represent a significant policy statement from Ministers in response to the IMO’s revised GHG strategy. It must be cast so as to outstrip the ambition of the IMO’s current strategy, while setting out stretching yet deliverable policy objectives and actions for the UK maritime sector. At a minimum we expect it to contain: • interim and overall targets for emissions from UK domestic and international shipping to 2050, together with a detailed plan to achieve the targets and details of the modelling and assumptions underpinning the targets; • a strategy to supply UK domestic and international shipping with zero-emission fuels derived from hydrogen, together with a strategy to develop facilities for the production, transmission and storage of such fuels, so as to outstrip IMO targets for the replacement of conventional fuels; • measures to leverage the UK’s expertise in shipping law and hydrography so as to support route optimisation measures in global shipping, and • measures to deliver decarbonised shore power to vessels berthed in UK ports, so as to reduce their emissions and improve port air quality.

The delay in publication of the revised Clean Maritime Plan is highly undesirable, particularly in the light of recent intensification of international dialogues on maritime decarbonisation. Stakeholders understandably demand policy certainty before making substantial investment decisions on decarbonisation strategies. Ministers must therefore update Parliament as soon as possible in the next session on their progress in finalising the review of the Clean Maritime Plan, and commit to a date, not later than three months from the date of State Opening, by which the revision of the Plan will be 62 Net zero and UK shipping issued. The update to Parliament must set out the issues which the revised Plan will address, including the Government responses to all outstanding consultations and calls for evidence relevant to maritime decarbonisation. (Paragraph 206) Net zero and UK shipping 63