Island Businesses Warn Over Ferry Costs Under Emissions Trading Scheme Plans

More than 35 Isle of Wight businesses, including the Isle of Wight Chamber, have written to the Government warning that plans to include domestic maritime services in the UK Emissions Trading Scheme (ETS) from July 2026 could have serious consequences for the Island.

In a joint letter to the Secretary of State for Energy Security and Net Zero, the group says the proposal risks increasing the cost of living, discouraging tourism and undermining vital ferry services that connect the Island to the mainland.

Ferry routes are described as essential lifeline services, supporting residents, businesses, healthcare access and millions of visitors each year.

Businesses fear that added costs from the ETS would inevitably be passed on to passengers, hitting both local families and the tourism sector.

While supporting national decarbonisation goals, ferry operators say they are currently unable to invest in greener vessels due to a lack of electricity grid capacity on both sides of the Solent.

Operators report being told by SSE that there is insufficient power to support fully electric ferries, with no clear timetable for upgrades.

The letter warns this could lead to unintended consequences, including operators being forced to continue using older, more polluting vessels because cleaner alternatives are not yet viable.

Businesses are also calling for the Isle of Wight to be treated in line with Scottish island communities, which have been considered for exemptions under the “Small Island Communities” definition, given the Island’s total reliance on maritime transport.

The coalition is urging the Government to consider a temporary, reviewable exemption for Solent ferry services and to work directly with operators to develop practical solutions that protect both connectivity and environmental ambitions.

A spokesperson said the policy risks damaging the Island’s economy without the infrastructure in place to support a transition to greener transport, and called for a more pragmatic, phased approach.

The group has requested a formal response from the Department for Energy Security and Net Zero and says it hopes to engage constructively to ensure climate targets do not come at the expense of the Island’s long-term resilience.