Nations debate historic first global carbon tax as shipping faces pressure to cut emissions
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A new levy on shipping emissions is on the cusp of being approved at talks in London this week. If implemented, it would be the world's first-ever global carbon tax.
Responsible for a
growing share
of global CO2 emissions, shipping has been one of the hardest sectors to decarbonise.
The international nature of the industry has made it difficult to align with national climate goals, so a global carbon pricing model is widely seen as the most effective mechanism for regulation.
If adopted, a robust pricing mechanism that covers the global shipping industry would be considered one of the most important climate agreements of the decade.
What's being proposed for the global shipping carbon tax?
The International Maritime Organisation (IMO), the regulator for international shipping, has convened a week-long meeting of its Marine Environment Protection Committee in London.
In 2023, the IMO set a target to reach net-zero emissions 'by or around' 2050, in line with the
Paris Agreement
and targets set by other industries. The group is expected to approve regulations on maritime CO2 emissions, which were proposed in 2023.
Led by
Pacific Island nations
, more than 60 countries support a standard price per tonne of emissions, which they believe offers a fair path to achieving net zero.
The shipping industry is broadly supportive. The International Chamber of Shipping, which represents over 80 per cent of the world's merchant fleet, says that a pricing mechanism for maritime emissions is 'the most effective way to incentivise a rapid
energy transition
in shipping.'
However, countries including China, Brazil, South Africa and Saudi Arabia, are pushing for a credit trading model. Under this approach, ships that emit less than their allowance would earn credits, which could then be sold to more polluting vessels.
Critics argue that this could allow wealthier ship owners to
simply buy compliance
, rather than making meaningful cuts to emissions.
Supporters of the carbon tax are hopeful that an agreement can be reached this week.
Maersk
Ambassador Albon Ishoda, Marshall Islands' special envoy for maritime decarbonisation, said IMO's climate targets are 'meaningless' without the levy.
Funds generated by the tax will be used to help developing countries transition to greener shipping or to fund mitigation measures in the most vulnerable countries. It will also be used to reward the production and uptake of
alternative fuels
.
The pricing structure has not yet been agreed upon but is expected to fall in the range of around $60 to $300 per tonne (€54 - €271).
America threatens to retaliate if a carbon tax is applied
As talks progress in London, the US has jumped in with a threat of 'reciprocal measures' if any carbon pricing mechanism is introduced.
A letter, circulated to many embassies of the countries in attendance at the IMO conference and seen by POLITICO, outlined the
US position
on a global carbon tax for shipping.
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It stated that the US will not accept any international environmental agreement that adds 'unfair' burden to America.
'Should such a blatantly unfair measure go forward, our government will consider reciprocal measures so as to offset any fees charged to US ships and compensate the American people for any other economic harm from any adopted GHG emissions measures,' the letter stated.
The US is notably absent from the IMO meeting this week, a marked shift from the Biden administration's previous involvement in
international climate talks
.
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Why is a carbon tax on shipping needed?
International trade runs on shipping, with more than 80 per cent of the world's goods carried by sea.
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But the industry is incredibly
carbon-intensive
, contributing around 3 per cent to global CO2 emissions. Data from Statista shows that between 2012 and 2023, CO₂ emissions from international shipping increased by roughly 15 per cent to 706 Mt per year.
If the shipping industry were a country, it would be the seventh-largest emitter of CO2 in the world.
More than 80 per cent of the world's internationally traded goods are moved by sea.
Kelly via Pexels
According to a report from the European Maritime Safety Agency (EMSA), shipping accounts for 14.2 percent of the CO2 emissions from transport in the EU, less than the road sector but approximately equal to aviation.
Unlike road and
aviation emissions
, limitations on shipping have been difficult to implement due to its cross-border nature and lack of clear jurisdiction.
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Emissions from shipping are also projected to increase sharply in the coming decades unless significant changes are made.
What can we expect from the shipping carbon tax meeting?
With high-stakes negotiations in London this week, there is cautious optimism that a global carbon levy on shipping can be agreed upon.
However, implementation of the tax is not a foregone conclusion. Against the backdrop of sweeping
US tariffs
, a global
trade war
on the horizon and vehement reluctance from some members, achieving consensus is not going to be easy.
If the committee can agree and finalise the text for the regulations, the next step will be formal adoption. This is expected in October, and if it goes through, the rules would come into effect in 2027.
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France 24
8 hours ago
- France 24
Sails, batteries and AI: What a green revolution in maritime transport might look like
Over the weekend, it was time for the key players of the maritime industry – ship owners, port authorities and others – to meet in Monaco for the Blue Economy and Finance Forum, one of the many special events held on the sidelines of the June 9-13 United Nations Ocean Conference. The key goal of the meeting was to come up with a plan on how to decarbonise maritime transport. Because while the UN summit focuses on protecting the oceans, the many ships that cross them are also a big part of the problem. Today, the shipping sector accounts for around 3 percent of the world's CO2 emissions – almost the same amount as the aviation industry. In Europe, it is even worse, and accounts for 14.2 percent of transport-related greenhouse gases, and about 4 percent of all emissions. The reason for this is that most ships are powered by heavy fuel oil, a dirty by-product of oil refining and one of the worst offenders when it comes to pollution and greenhouse gases. Although international measures have helped reduce emissions for individual ships in the past few years, the growing number of freight vessels – the biggest polluters – means that total emissions still continue to climb. Net-zero by 2050: a huge challenge To come to terms with this, the International Maritime Organization (IMO) has set an ambitious target for the shipping industry of net-zero emissions by 2050. It is a huge challenge. 'Shipping is one of the most difficult sectors to decarbonise,' said Pierre Marty, a maritime transport expert and lecturer at the French engineering school Centrale Nantes. 'For cars, the solution came quickly with the development of electric vehicles and batteries. For planes, the industry immediately went for synthetic kerosene. But it's harder for the shipping sector because there is no one-size-fits-all solution,' he said. From leisure yachts to bulk carriers and container ships, they all have different needs depending on their size, the distance they travel and how many port stops they do. 'What works for one ship might be useless for another,' Marty said, but noted they all have one common challenge: 'to meet high energy demands in the often limited space on board'. To make a real difference, he said, the focus needs to be on larger vessels. Although they only make up 25 percent of the global fleet, container ships, bulk carriers, LNG and chemical tankers account for around 80 percent of maritime CO2 emissions. They also often travel longer distances and use more energy. Electric ships? Among the many solutions that have been studied in recent years, electrification is one of the most promising so far. As with cars, it would involve equipping a ship with a battery that would be recharged when docked in port. 'This solution has already been adopted by some leisure boats and smaller container ships,' Fanny Pointet, head of maritime transport at the NGO Transport and Environment, said. 'But it's not at all adapted to long-distance vessels. You can't recharge batteries in the middle of the ocean,' she said. 'An intermediary and alternative solution would be to use the batteries just for moving in and out of ports,' she suggested. 'This would not only help reduce emissions, but also lower air pollution.' British-owned P&O Ferries is one of the companies that has already announced it is equipping its Dover-Calais ferries with hybrid engines for this purpose. Biofuels, LNG and synthetic fuels Another option is for vessels to switch to alternative fuels like biomethanol. In September, Danish shipping giant Maersk surprised the industry by presenting a 32,000-ton container ship (capable of carrying 2,100 containers) powered by biomethanol from forestry and agricultural waste. 'But again, this isn't scalable in the long term because we don't have enough biomass to meet global demand,' Pointet remarked. Some civilian actors have instead turned to liquefied natural gas (LNG), but that, too, has its consequences. LNG is mostly made up of methane, which is a potent greenhouse gas, and the European Environment Agency and the European Maritime Safety Agency have both warned of the rise in methane emissions because of the sector's increased use of LNG. 'That leaves green hydrogen and synthetic fuels, which are widely seen as the most sustainable solutions,' Pointet said. But, Marty added, 'these [technologies] are in between development and commercialisation at the moment. They are not mature enough yet, and therefore very expensive.' Shapes, speed and AI Aside from turning to greener fuels, another key lever is to make ships more energy efficient in and of themselves. This is where ship design would come in, with designers potentially equipping vessels with sails, propulsion-enhanced propellers and optimising their hull shapes. Artificial Intelligence (AI) can also help make the industry greener. 'With AI, it is possible to plot routes that would require the least energy by taking winds and currents into account,' Pointet said. Another point of discussion is reducing engine power and speed limits. One recent study showed that by just lowering average global speeds by 10 percent, CO2 emissions would be reduced by 13 percent. It would also halve the risk of whale collisions and slash underwater noise by 42 percent. 'In the end, the ship of the future will most likely combine a bit of everything; hybrid engines, better hull designs and alternative fuels – all adapted to the specific needs of each vessel,' Pointet said. And if the ships advance, so will the ports that host them. 'The priority here is electrification in ports,' Pointet said. 'Because even when ships are docked, many of them, like passenger ships, often need to keep their engines running to maintain services onboard.' The massive cost of going green But, both experts concluded, massive investments – to the tune of between $8 billion and $28 billion (€7.5 billion and €26 billion) a year – are needed until 2050 to embark on this green maritime revolution . And that is without counting the infrastructure that would be needed to make and distribute green fuels. To anticipate these massive costs, some 100 delegations brought together by the IMO in April agreed to create a global carbon pricing mechanism. According to the plan, all ships will as of 2028 have to meet CO2 emissions quotas by using cleaner fuels. Those who exceed the limits will be fined hundreds of euros per ton of CO2 emitted. According to researchers working at the shipping and ocean transport department at the University College of London, this measure alone could generate between $30-40 billion in revenues by 2030. But, Pointet warned, exemptions of various kinds could undermine the measure's impact. 'And there are still many other questions pending, especially [regarding] what kind of fuels will qualify as clean energy.' Before going into effect, the carbon pricing mechanism must be approved in a second IMO vote scheduled for October. That means that the industry heavyweights and oil-rich nations opposing the plan still have time to try to sink the deal.
France 24
02-06-2025
- France 24
Nations urged to make UN summit a 'turning point' for oceans
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France 24
30-05-2025
- France 24
France says it has common ground with China on environment
Her trip came ahead of the UN Ocean Conference (UNOC), which is due to start in Nice on June 9, and the COP30 climate summit in Brazil in November. After the United States again withdrew from the landmark Paris climate agreement once President Donald Trump returned to office in January, France has advocated for the European Union and China to form a united front on environment and climate. "Points of convergence were clearly felt," Pannier-Runacher told AFP after holding meetings with multiple Chinese officials, including environment minister Huang Runqiu and natural resources minister Guan Zhi'ou. "Commitment to the Paris Agreement" and "multilateralism" were two such points, she said. Pannier-Runacher said she was hoping for a joint-statement ahead of the COP30 summit to help give momentum to negotiations. "At a time when science is doubted by some, when the impact of climate deregulation on our lives is contested (...) it is important for the European Union and China to assume their responsibilities," she said. Huang told Pannier-Runacher that China would "keep observing the objectives set by the Paris accord and work with all parties to promote positive results" at the COP30 summit, a statement issued by his ministry said. China is the world's top emitter of greenhouse gases, but has embraced renewable energy sources, electric vehicles and is working to reduce carbon emissions. It plans to peak carbon emissions by 2030 and reach net zero by 2060, and some analysts have speculated that slowing growth and rapid renewable installations mean emissions have already levelled off. Emissions indeed fell in the first quarter of 2025, an independent think tank said earlier this month. Pannier-Runacher hailed China's "dynamism," saying all could learn from its "quickness" on adopting renewable energy technologies. The French minister also said China was a leader in those technologies, and expressed hope it would invest in France and other European countries to create jobs.
