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

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.

My Lords, I thank the Minister for introducing today’s regulations. I know my noble friend Lord Moynihan is disappointed not to be here for this debate—the second one in a week on an instrument that we all believe will be deeply damaging to the economy. He offers his apology as he has to attend a long-standing political appointment to which he is committed. I declare my interest as the unremunerated chair of Eq.flight, working towards the development of nuclear-derived sustainable aviation fuel. This House voted to regret last week’s instrument due to the nationwide effects that it will have on our economy and our way of life. Although this week’s is not quite so wide-ranging, we regret that the Secretary of State is taking his economic wrecking ball to two specific industries. Before I speak to the economic impact that this statutory instrument and other associated measures the Government are taking will have, I first note that the implementation of the instrument raises concerns. The Explanatory Memorandum states: “The exact methodology for determining the UK’s share of IAIS emissions for the purposes of measuring and reporting emissions from CB6 onwards will be determined separately by the Secretary of State, and before laying the first annual statement of UK emissions for the CB6 period”. The Government are putting the cart before the horse.