Governments Expected to Agree on World’s First Levy on Shipping Emissions At Upcoming IMO Meeting

Countries are expected to close in on a global shipping levy at next week’s International Maritime Organization meeting in London.

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Support is growing for a global tax on shipping emissions, which is bound to be agreed upon at a key UN meeting next week.

Over 50 countries across Europe, Africa, Asia, the Pacific and the Caribbean, representing a majority of the world’s fleet, are rallying behind a proposal to charge commercial vessels a flat fee for each tonne of carbon emitted. 48 countries including major shipping nations like Greece, Japan, Korea, and the UK, along with the European Commission and the International Chamber of Shipping (ICS), said the tax should range between US$18-150 per tonne of greenhouse gas.

A study by the UN Trade and Development (UNCTAD), commissioned by the IMO last year, found that a levy of $150-300 per tonne of greenhouse gas would lower the economic impacts of shipping decarbonization on global GDP growth. However, this would only be the case if the revenues from the levy were disbursed exclusively to the most climate change-vulnerable states, UNCTAD concluded.

“The industry fully supports the adoption by IMO of a GHG pricing mechanism for global application to shipping,” said Gu Platten, Secretary General of ICS, the global trade association for shipowners and operators. “The joint text put forward by this broad coalition is a pragmatic solution and the most effective way to incentivise a rapid energy transition in shipping to achieve the agreed IMO goal of net zero emissions by or close to 2050.”

The shipping industry is a vital artery of world trade, moving some 90% of goods across international waters. However, it is also one of the most carbon-intensive industries due to its reliance on fossil fuels, responsible for nearly 3% of all greenhouse gas emissions, primarily carbon dioxide. If shipping were a country, it would be the sixth largest emitter of planet-warming greenhouse gases worldwide, ranking between Japan and Germany, according to the World Bank.

Implementing carbon pricing in the shipping industry would make the use of polluting fossil fuels more expensive, incentivizing shipping companies to explore lower-emitting fuels like ammonia, biofuels, methanol, and hydrogen.

For Albon Ishoda, Marshall Islands Special Envoy for Maritime Decarbonization, the debate is “no longer about whether a levy is needed,” but rather “about ensuring it is strong enough to be effective.”

Countries are expected to reach an agreement at next week’s 18th International Maritime Organization’s meeting in London and finalize the decision in April. If adopted, the levy is expected to enter into force globally in early 2027.

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Featured image: Martina Igini/Earth.Org.