More than 35 businesses across the Isle of Wight have signed a joint letter warning that Government plans to expand the UK Emissions Trading Scheme (ETS) could increase cross-Solent ferry fares by as much as 15%, with serious consequences for the Island’s economy, connectivity and tourism sector.
From 1st July, the ETS will apply to domestic maritime vessels over 5,000 gross registered tonnes (GRT), which includes Wightlink’s St Clare and Victoria of Wight.
The policy introduces a new levy intended to decarbonise shipping, but the UK Chamber of Shipping has warned that ticket prices could rise by up to 15% on affected routes.
Island ferry operators provide essential lifeline services for residents, businesses, healthcare access and millions of visitors each year. Local organisations fear the added costs will inevitably raise the price of Island life, discourage leisure travel, and undermine sectors already under pressure – especially tourism.
The joint letter, addressed to Secretary of State Ed Miliband, expresses deep concern that the ETS policy is being rushed through without any plans to put in place the necessary infrastructure. Co-signed by organisations such as the Isle of Wight Chamber of Commerce, it urges the Government to reconsider the approach and calls for urgent exemption or delay.
Despite supporting national decarbonisation efforts, ferry operators say they are unable to invest in fully electric vessels due to a lack of grid capacity. According to the letter, operators have been informed by SSE that there is currently insufficient power available and no timeframe has been given for upgrades.
Businesses warn that the policy may create perverse outcomes, where operators are forced to use older, more polluting vessels because modern alternatives are not viable under current infrastructure conditions.
The group also highlights the disparity in treatment between UK islands. While Scottish ferry routes have been granted an exemption until 2030 under the “Small Island Communities” definition, and Northern Ireland is receiving a 50% discount, the Isle of Wight will see full charges apply from July.
Joe Robertson, MP for East Wight, has spoken against the policy in Parliament and confirmed that the Government has now voted to approve the legislation.
He said:
“The Government knows this will have an adverse impact on UK islands, because it has exempted travel to Scottish islands from this punitive levy. What it hasn’t done is extend that exemption to all UK islands, which means my constituents on the Isle of Wight are now facing an additional cost of getting to and from home.
“There is no other way to travel to the Isle of Wight than by ferry. There is no other way of getting goods to the Isle of Wight.”
The coalition of Island businesses is urging the Government to introduce a reviewable exemption or derogation for Solent ferry services, until grid capacity improvements make true decarbonisation viable. They are also calling for direct engagement with affected operators to co-develop solutions that balance environmental goals with essential connectivity.
Fran Collins, CEO of Red Funnel, which operates one of the lifeline ferry services to the Isle of Wight said:
“We are disappointed that the Isle of Wight has not been granted the same exemption from the domestic ETS scheme as other lifeline communities, such as the Scottish islands. With no insufficient shore‑side power capacity in Southampton available to support electrification of either our current fleet, or even new vessels, operators have no way to operate a net zero service. Imposing ETS costs on the Isle of Wight’s essential, and genuine lifeline service brings disproportionate impacts on the island’s residents, businesses and visitors, and we strongly urge the Government to consider delaying the application of the ETS until alternative options are available to enable emission-free operation.”
