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My understanding is that the systems are for use domestically. They will not have to interface with any other digital systems. However, the regulations will keep us in line with EU developments. More broadly, in terms of the policy, we want to be alongside the EU in having a digital tracking system, but it is not as if the data or the systems that we are using in Scotland will have to interface with any systems outwith the UK.

I will need to bring in Haydn Thomas on that.

No. No more data will be available publicly than is available now. In effect, we are taking the current paper-based system and turning it into a digital system. Businesses will have to use software to input the information. However, it is not as if commercially sensitive data or granular source data will be available to the public. It will just be the general reports that we have now. There will be no difference in what is reported.

I am pleased to provide evidence supporting the draft Greenhouse Gas Emissions Trading Scheme (Amendment) (Extension to Maritime Activities) Order 2026. The ETS authority, formed and jointly run by the four nations of the UK, is extending the scope of the scheme to include emissions from domestic maritime activities. That builds on the existing coverage of aviation, power generation and energy-intensive industries within the UK ETS. It incentivises cost-effective maritime decarbonisation and encourages efforts across our society and communities towards net zero goals.

The expansion is focused on emissions related to domestic voyages between UK ports as well as emissions at berth in UK ports, and it will apply to ships of 5,000 gross tonnage or more. In response to extensive stakeholder feedback, there will be exemptions for specific activities, such as search and rescue activities and humanitarian aid, and specific types of ship, including publicly funded research vessels.

Importantly for Scottish interests and for our support for islands and peninsular communities, ferry services in Scotland are also exempt from the scheme, as they maintain essential connectivity to those areas, and fish catching and processing vessels are also exempted. The instrument that is under consideration provides technical detail on the practical aspects of bringing the domestic maritime sector into the UK ETS, including on the regulation of operators, the monitoring and analysis methodology, and annual reporting on maritime emissions.

As in other sectors that are included in the scheme, owners of in-scope vessels or, on their behalf, those to whom the responsibility is delegated will purchase allowances for each tonne of carbon dioxide emitted and surrender them at the end of each scheme year. For maritime emissions, there will be a surrender reduction for voyages between Great Britain and Northern Ireland, in order to avoid a carbon pricing imbalance.

As the expansion to domestic maritime emissions will occur in July this year, arrangements will also be in place to allow double surrender of allowances for both the shorter 2026 and full 2027 scheme years by April 2028.

The instrument adjusts the ETS cap to account for the maritime sector. The scheme will extend to vessels that provide support or services for offshore structures from January 2027. Including those ships at a later date is an alignment approach that is taken in the EU ETS that avoids market distortions ahead of their equivalent inclusion in the EU scheme.

The ETS authority has consulted extensively on the inclusion of domestic maritime in the UK ETS, in order to ensure that it is incentivising emissions reduction in a way that is fair and that accounts for industry best practice. In doing so, it has engaged with businesses across the UK and has held specific workshops with our island communities.

The instrument represents an important step in the on-going development of the UK ETS, recognises the importance of maritime operations to our economy and net zero journey, and lays the groundwork for future expansion to international voyages, which was the subject of a recent authority-wide consultation.

The business and regulatory impact assessment for the instrument was laid on 30 January, after extensive engagement with Scottish businesses.

That is not my area of expertise, but the negotiations considered the different types of biofuels that might be available. It is ultimately for the shipping companies and the international operators to decide how they want to decarbonise and to consider the fuel options that are available to them. They could decide that some vessels are not able to decarbonise to a certain extent and that they will pay the fees and additional costs that are associated with not decarbonising. As an example of such decarbonisation, when cruise ships berth in UK ports, I hope that they will be able to take on an electric fuel supply to reduce the use of diesel.

I will need to look into that, but, if those vessels want to decarbonise and stop using diesel, the most readily available option for them would be to use biofuels.

I do not have an estimate of the particular emissions reduction that will be associated with the instrument. If there is any information on that, it will likely be a UK-wide estimate. However, we can write to the committee. If we have the information, I will get a letter back to the committee on all these detailed questions about specific issues, but I have information only about the instrument with me today.

Yes.

Do you mean the interface between the actual software?

Mainly because of the exemptions, there is a very limited impact on Scotland-based operators. Approximately 96 per cent of the costs are expected to fall on international operators. We did extensive work with island communities and operators, and, as a result, we very quickly decided to exclude fishing and fish processing vessels and lifeline ferry services for island and peninsula communities, for the reasons that I set out in my statement.