LONDON — The shipping industry, which handles about 90% of global trade, may soon face its first global carbon price. The International Maritime Organization (IMO) is meeting in London this week to negotiate binding measures to reduce the sector’s climate impact — with a historic emissions levy now firmly on the agenda.
This isn’t the first time a carbon tax has surfaced in maritime circles. But now, the stakes are higher. The IMO’s Marine Environment Protection Committee (MEPC) is under growing pressure to finalize a set of mid-term emissions reduction measures in 2025. The talks this week could lay the groundwork for a global carbon pricing mechanism — a first for any international sector.
Delegates are considering a few options. One proposal is a global marine fuel standard. Another is a market-based measure like a carbon credit system. But it’s the emissions tax — a direct levy on carbon output — that’s drawing the most attention, and controversy.
Sara Edmonson, head of global advocacy at Fortescue, didn’t hold back when describing the significance. “I think it would be an absolute game-changer,” she said. “No other industry on a global level has made a commitment of this size.”
Still, there’s deep division. Island nations such as Fiji, Vanuatu, and Barbados, which face existential climate threats, are pushing for decisive action. Meanwhile, heavyweights like China, Brazil, and Saudi Arabia warn a levy could hurt economic competitiveness and widen inequalities. The word “levy” itself has become politically sensitive, especially in countries like the U.S. and Australia.
John Maggs of the Clean Shipping Coalition expects some form of agreement but doubts it will please everyone. “It’s not really a question of whether they get agreement, it’s just how ambitious it is, how effective it is and how many unhappy people there are,” he noted.
The IMO’s current target is net-zero emissions from shipping by or around 2050. Achieving that, however, will take more than just words on paper. Technical solutions alone won’t cut it without an economic push — and that’s where the proposed carbon tax comes in.
Yet, resistance remains strong. Countries wary of external influence and economic disruption have demanded safeguards and flexibility. Negotiators are now toying with “levy-like” structures that deliver similar outcomes without the baggage of the word “tax.”
Some climate advocates argue that the IMO is moving faster than the UN’s main climate body, the UNFCCC. Vanuatu’s Minister Ralph Regenvanu called this moment a “great opportunity” to drive progress. “This would be the first industry-wide measure adopted by a multilateral UN organization with much more teeth,” he said.
With talks scheduled to conclude Friday, all eyes are on whether delegates can bridge the gap between ambition and pragmatism. Angie Farrag-Thibault of the Environmental Defense Fund believes that a successful deal will pair a global fuel standard with a robust pricing mechanism — and ensure funding flows to the regions most at risk.
The outcome could shape the trajectory of maritime decarbonization for decades. Whether the IMO can steer this mammoth sector toward a greener course now depends on how much political will remains in the room by week’s end.
Update: US to pulls out of carbon talks.
Trump’s IMO bombshell: US pulls out of carbon talks with retaliation threat
The Trump administration says it has pulled out of International Maritime Organization negotiations to decarbonise shipping and threatened to retaliate against any fees imposed on US vessels.
Source:CNCB
