Island Businesses Unite to Oppose ETS Charges Threatening Local Economy

More than 35 businesses across the Isle of Wight including the Isle of Wight Chamber have come together to raise urgent concerns about the Government’s proposal to include domestic maritime operations in the UK Emissions Trading Scheme (ETS) from July 2026. In a joint letter sent this week to the Secretary of State for Energy Security and Net Zero, the group warns that the move could have serious and disproportionate consequences for the Island’s economy, connectivity, and communities.

Island ferry operators provide essential lifeline services between the Isle of Wight and the mainland, supporting residents, businesses, healthcare access, and millions of visitors each year. Organisations fear that the additional costs created by the ETS expansion will inevitably add to the cost of Island life, discourage leisure travel, and undermine the financial stability of sectors already under pressure, especially tourism.

Despite supporting national efforts to decarbonise, local ferry operators say they are currently unable to progress major green investment due to the lack of available grid capacity on both sides of the Solent. According to the letter, operators have been informed by SSE that there is insufficient power capacity to support fully electric vessels, and that no timeframe can yet be given for the necessary upgrades.

The signatory businesses warn that the policy risks creating perverse outcomes, where operators may be forced to use smaller, older, and more polluting vessels because the infrastructure does not exist to support cleaner alternatives.

The joint letter also highlights that Scottish island ferry routes have been considered for exemption under the “Small Island Communities” definition and calls for the Isle of Wight to receive the same fair consideration, given its complete reliance on maritime transport.

The group is urging the Government to:

· Introduce a reviewable exemption or derogation for Solent lifeline ferry services, until grid capacity improvements make true decarbonisation viable.

· Engage directly with affected operators to understand the practical challenges and co-develop solutions that support both environmental goals and essential connectivity.

A spokesperson for the coalition of local businesses said:

“Islanders and Island businesses are deeply concerned that this rushed policy will damage our economy, limit essential travel, and leave us worse off, all without any of the infrastructure in place to support the greener future we all want to see.”

“We urge the Government to take our position seriously, just as it has for the Scottish islands, and ensure that lifeline ferry services are protected while proper decarbonisation measures are made possible.”