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The Hindu
13-05-2025
- Business
- The Hindu
How is the shipping industry tackling emissions?
The story so far: After a decade of deliberations towards decarbonising the maritime industry, at its 83rd session, the Marine Environment Protection Committee (MEPC-83) of the International Maritime Organization (IMO) was faced with the challenge of coming to a consensus on a proposed emissions levy on global shipping. The session's objective was to adopt a Market-Based Measure (MBM) that balanced environmental effectiveness with economic fairness. What were the proposals? Five distinct proposals were tabled in the meeting. The first was by the International Chamber of Shipping which advocated for a fixed levy per every tonne of CO₂ emitted. Secondly, China proposed a market-driven approach where ships could trade compliance units and invest in alternative fuels. The European Union suggested a fixed Greenhouse Gas (GHG) levy, managed by an IMO-administered fund while India propositioned a 'bridging mechanism', which would target only under-compliant ships to bear the financial burden, while rewarding those using Zero or Near-Zero (ZNZ) fuels. Finally, Singapore also joined the fray by proposing an enhanced version of India's model, involving a GHG Fuel Standard (GFS) and a tiered system rewarding surplus emission units and requiring the purchase of remedial units for underperformance. Even before the debate on MBMs could fully unfold in the IMO, geopolitical tensions took centre-stage. The U.S. Trump administration, which had already withdrawn from the Paris Agreement and stripped the agency that responds to disasters from their climate work related responsibilities, did not participate in the IMO deliberations. It warned of 'reciprocal measures' if the EU-backed uniform carbon levy were passed. What was decided? The MPEC-83 of IMO voted 63 to 16 in favour of accepting Singapore's hybrid model based on India's proposal as the IMO's Net Zero Framework, making international shipping the first global industry to adopt a mandatory emissions levy framework. Having piloted a compromise formula amidst extremely divergent views, both India and Singapore have claimed credit for the successful outcome. However, the decision of the MEPC-83 is not final yet. Despite the vote, the path to implementation is far from straightforward. The MEPC-83's decision, having approved the Net Zero Framework, now needs to amend Annex VI of the MARPOL convention, which governs air pollution from ships. The amendment will undergo a six-month circulation period among all contracting parties to MARPOL. For final adoption, it requires a two-thirds majority of votes from members present and voting; this means that if all 101 parties participate, at least 67 must support the measure. Even if adopted, the amendment could still be blocked, should one-third of the parties — provided they account for at least 50% of global shipping tonnage — formally object in writing. Currently, with 63 votes in favour, 16 against, and 22 abstentions, the outcome remains uncertain. The process ahead is critical and could reshape the dynamics of global shipping regulation for decades to come. What other interests were at play? The wide range of positions expressed during the MEPC-83 underscores the enduring dominance of national interests in global climate diplomacy. Oil-exporting countries, led by Saudi Arabia, opposed any significant transition to green fuels, prioritising the protection of their fossil fuel markets. In contrast, small island nations and least developed countries advocated for steep carbon levies, seeking to redirect revenues into broader green development initiatives. Moreover, China, along with other large shipping nations, pushed for minimal levies to preserve competitiveness while focusing on investments in cleaner fuels. Norway and other Scandinavian countries have been seeking recognition for their early and costly efforts in decarbonising shipping, proposing that these efforts be rewarded through surplus credit systems. Brazil has been advocating for a rapid shift to methanol as a primary marine fuel, while several nations, citing a lack of viable green technologies, hoped for delayed implementation. Even after voting, scepticism has lingered among shipowners in traditional maritime powerhouses like Greece, who question the necessity and feasibility of a green levy altogether. The range of these responses illustrates the immense challenge the IMO faces in crafting a universally acceptable emissions framework. Why does green shipping matter? Shipping may seem invisible to most consumers, but it plays an outsized role in global emissions. The sector emits approximately one billion metric tonnes of GHG each year, representing about 2.8% of total global emissions. If ranked as a country, international shipping would be the sixth-largest emitter in the world, between Germany and Japan. Projections indicate that, without corrective action, emissions from shipping could rise by as much as 50 to 250% by 2050. Even though the sector contributes less than road transport emissions, they face heavier regulatory pressure because of their international nature. Therefore, to align with the 13th UN Sustainable Development Goal as well as the Paris Agreement, the IMO began implementing emissions-reduction measures in 2011, followed by the Initial GHG Strategy in 2018 and the updated IMO GHG Strategy in 2023. It has also included a technical measure such as the Energy Efficiency Design Index in Annex VI of the MARPOL convention; an operational measure, the Ship Energy Efficiency Management Plan, for reduction of GHG emissions from ships; and introduced mandatory recording and reporting of fuel oil consumption. Consistent with the 'Paris agreement temperature goals' it has also adopted 'levels of ambition' and 'guiding principles'. Between 2018 and 2023, it has agreed to fix a target for reducing carbon intensity (CO2 emissions per transport work) by at least 40% by 2030 compared to 2008 levels, and by 70% by 2040, ultimately achieving net-zero by 2050. This is notably more concrete than the International Civil Aviation Organization, which has only pledged a 'long-term aspirational goal' of net-zero emissions by 2050 without setting interim targets. Is it an equitable distribution? There has been a gradual erosion of the guiding principle of 'common but differentiated responsibilities and respective capabilities' (CBDR-RC) incorporated in the 2018 initial GHG strategy. The CBDR-RC is a core principle enshrined in climate agreements like UNFCCC, Kyoto Protocol and the Paris Agreement. It acknowledges that all nations must address climate change but recognise historical responsibility and unequal capacities. Developed nations, with their longer industrial histories, are expected to bear greater burdens. However, recent IMO proceedings reflect an effort by wealthier nations to shift responsibility onto developing economies, despite stark differences in income and consumption. How does India benefit? While the carbon levy and GHG targets set by the IMO may pose short-term challenges for certain sectors of the Indian economy, India is likely to emerge as a long-term beneficiary of the new MBM framework. According to the United Nations Conference on Trade and Development, the impact of the MBM on India's maritime logistics costs will be modest in the near term — ranging from 4.98 to 7.29% on imports and 5.92 to 8.09% on exports by 2030. By 2050, these figures are projected to rise to about 33 to 35%. However, the actual impact on trade volumes is expected to be minimal. India currently operates nearly 236 ships over 5,000 gross tonnage, with only 135 involved in international voyages. Since MBMs apply only to international shipping, India's coastal fleet remains unaffected. At present, India spends roughly $400 million per year on fuel for its international fleet. The MBM is projected to increase this by approximately $108 million by 2030 — a manageable rise given the scale of India's maritime economy. Perhaps the most exciting implication of the MBM framework is the potential for India to become a global hub for clean energy exports. As the world's third-largest importer of fossil fuels, India is now investing heavily in green hydrogen through its National Hydrogen Mission. Industrial giants such as Reliance, Adani, and JSW are planning to scale up production, while three Indian ports are preparing to offer green hydrogen bunkering services. Under the mission's guidelines, Indian green hydrogen must meet a well-to-wake greenhouse gas fuel intensity of no more than 2 kg CO₂e per kilogram of hydrogen, translating to about 16.7 grams of CO₂ equivalent per megajoule. This standard positions Indian hydrogen well within the IMO's reward thresholds, which are capped at 19.0 g CO₂e/MJ until 2034 and 14.0 g CO₂e/MJ thereafter. This alignment creates a significant opportunity for India to export green fuels globally and capitalise on international incentives. Global shipping now stands at a transformative moment. Despite persistent disagreements and uncertain implementation pathways, the adoption of a MBM by the IMO represents a milestone in the journey toward decarbonisation. If successful, this framework could make shipping the first truly global sector to operate under binding climate goals, setting a powerful precedent for others to follow. Amitabh Kumar, a retired IRS officer, is former Director General of Shipping, Government of India. Views expressed are personal.
Zawya
21-04-2025
- Business
- Zawya
IMO plans tough rules to curb shipping emissions
The International Maritime Organisation (IMO) has agreed to establish a legally binding framework to reduce greenhouse gas emissions from ships globally effective 2028 as several African nations join Pacific Island states withholding their support for a global shipping emissions agreement. Uganda, Egypt, Liberia, Madagascar, Seychelles, and Ghana abstained during the final vote at the IMO's Marine Environment Protection Committee (MEPC 83) talks. They opposed the agreement, which aims for net-zero emissions by or close to 2050, declaring the deal inadequate to address the climate crisis--an unprecedented display of cross-regional solidarity. The agreement, which received backing from Kenya, Namibia, and South Africa, among other nations, did not establish a robust carbon pricing mechanism or clear provisions for revenue sharing with climate-vulnerable nations. The coalition, comprising Caribbean, African and Central American states, and the UK, had put forward a proposal for a universal levy on greenhouse gas emissions. The result was that 63 countries voted in favour, while 16 voted against. Saudi Arabia, the UAE and other petro-states disagreed over the issue of procedure and the 'high' level of ambition in the discussions. Read: At a pivotal meeting, the world is set to decide how to cut shipping emissionsAfrican coalition delegations connected the levy to critical priorities of food security, climate resilience, and equitable revenue distribution. Despite the deal's passage, the coalition said it would still push for more substantive action. This proposal aimed to reduce shipping emissions, ensure a just and equitable transition, and provide predictable financing for those worst hit by climate change. Many of the world's largest shipping nations decided last week to impose a minimum fee of $100 for every metric tonne of greenhouse gases emitted by ships above certain thresholds, in what is effectively the first global tax on emissions. By 2028, all ships worldwide have to start using a less-carbon-intensive fuels mix or pay for the excess. A ship continuing to use conventional (fossil) bunker fuel would have to pay a $380 fee on its most intensive emissions, and $100 per tonne on remaining emissions above a lower threshold, the IMO said. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (
Zawya
14-04-2025
- Business
- Zawya
Global majors reach historic deal on cutting shipping emissions
After years of intense negotiations, many of the world's largest shipping nations have reached a landmark deal to cut greenhouse gas emissions from global shipping, setting mandatory fuel standards and introducing an industry-wide carbon pricing mechanism. The framework – agreed during the UN International Maritime Organisation (IMO) Marine Environment Protection Committee – aims for net-zero emissions from the sector by 2050 and will be formally adopted in October before coming into force in 2027. They will apply to large ocean-going vessels over 5,000 gross tonnage, which collectively account for 85% of carbon dioxide emissions from the marine shipping fleet. IMO Secretary-General Arsenio Dominguez hailed the breakthrough after a 10-year deadlock, emphasising the collaborative spirit that led to the deal. "The approval of draft amendments to Marpol Annex VI mandating the IMO net-zero framework represents another significant step in our collective efforts to combat climate change, to modernize shipping and demonstrates that IMO delivers on its commitments," he stated. Marpol Annex VI refers to provisions in the International Convention for the Prevention of Pollution from Ships, specifically addressing air pollution. It already includes mandatory energy efficiency requirements for ships and has 108 Parties covering roughly 97% of the world's merchant shipping fleet by tonnage. The framework introduces a dual approach: a global fuel standard that will progressively lower the annual greenhouse gas fuel intensity of marine fuels, and a greenhouse gas pricing mechanism requiring high-emitting ships to pay for their excess pollution, said experts. Under the new system, ships that exceed emissions limits will need to acquire remedial units to offset their excess pollution, they stated. Meanwhile, vessels operating with zero or near-zero emissions will be eligible for financial rewards, creating a market-driven push toward cleaner maritime transport, they added.- TradeArabia News Service Copyright 2024 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (
Trade Arabia
13-04-2025
- Business
- Trade Arabia
Global majors reach historic deal on cutting shipping emissions
After years of intense negotiations, many of the world's largest shipping nations have reached a landmark deal to cut greenhouse gas emissions from global shipping, setting mandatory fuel standards and introducing an industry-wide carbon pricing mechanism. The framework – agreed during the UN International Maritime Organisation (IMO) Marine Environment Protection Committee – aims for net-zero emissions from the sector by 2050 and will be formally adopted in October before coming into force in 2027. They will apply to large ocean-going vessels over 5,000 gross tonnage, which collectively account for 85% of carbon dioxide emissions from the marine shipping fleet. IMO Secretary-General Arsenio Dominguez hailed the breakthrough after a 10-year deadlock, emphasising the collaborative spirit that led to the deal. "The approval of draft amendments to Marpol Annex VI mandating the IMO net-zero framework represents another significant step in our collective efforts to combat climate change, to modernize shipping and demonstrates that IMO delivers on its commitments," he stated. Marpol Annex VI refers to provisions in the International Convention for the Prevention of Pollution from Ships, specifically addressing air pollution. It already includes mandatory energy efficiency requirements for ships and has 108 Parties covering roughly 97% of the world's merchant shipping fleet by tonnage. The framework introduces a dual approach: a global fuel standard that will progressively lower the annual greenhouse gas fuel intensity of marine fuels, and a greenhouse gas pricing mechanism requiring high-emitting ships to pay for their excess pollution, said experts. Under the new system, ships that exceed emissions limits will need to acquire remedial units to offset their excess pollution, they stated.
Euronews
09-04-2025
- Business
- Euronews
Nations debate historic first global carbon tax as shipping faces pressure to cut emissions
ADVERTISEMENT 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. ADVERTISEMENT 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 . Related Member states favour exempting international shipping from EU microplastic rules Environmental groups warn of 'multiple toxic hazards' after North Sea ship crash 'Time capsules' of toxic consumption: What happens to the shipping containers lost at sea? 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. ADVERTISEMENT 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. ADVERTISEMENT 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. ADVERTISEMENT
