IMO Prepares To Finalise First-Ever Levy On Shipping Emissions

Shipping emissions are a major contributor to global greenhouse gas emissions (GHG) levels, impacting the environment and human health. The maritime industry accounts for nearly 3% of global CO₂ emissions, mainly due to its reliance on fossil fuels like heavy fuel oil (HFO) and marine diesel.

Governments worldwide are moving closer to finalising a historic carbon levy on shipping emissions, with a major decision expected at next week’s 18th International Maritime Organisation (IMO) meeting in London.

The proposal, which has gained strong backing from over 50 countries, aims to impose a fixed fee on carbon emissions from commercial ships to decarbonise the industry and accelerate the shift toward cleaner fuels.

Countries from Africa, Asia, the Caribbean, Europe and the Pacific, representing a major portion of the world’s shipping fleet, favour implementing a flat-rate tax on each tonne of greenhouse gas emitted by vessels. The proposal has also received the support of major shipping nations like Greece, Korea, Japan, and the UK, alongside the European Commission and the International Chamber of Shipping (ICS).

The suggested tax rate ranges between $18 and $150 per tonne of emissions. A UN Trade and Development (UNCTAD) study, commissioned by the IMO last year, analysed the economic impact of such a levy. The research found that if the tax is set between $150 and $300 per tonne, it could minimise negative effects on global GDP growth- but only if the revenue is directed toward the most climate-vulnerable nations.

The shipping industry plays an important role in global trade, transporting 90% of the world’s goods. It remains one of the largest contributors to carbon emissions. These emissions contribute to climate change, with carbon dioxide leading to global warming and rising sea levels, while black carbon causes faster ice melting in the Arctic.

Studies show that if the shipping sector were a country, it would be the sixth largest emitter of greenhouse gases, positioned between Germany and Japan. The International Chamber of Shipping (ICS), which represents shipowners and operators worldwide, has thrown its weight behind the initiative. The organisation’s Secretary General has described the joint proposal as a pragmatic and effective solution to encourage the transition to cleaner energy sources and meet the IMO’s target of net-zero emissions by 2050. If implemented, the carbon levy would make traditional fossil fuels more expensive, forcing shipowners to consider alternative low-emission fuels like ammonia, biofuels, hydrogen and methanol.

For the Marshall Islands, one of the strongest advocates for shipping decarbonisation, the focus is now on ensuring that the levy is strong enough to drive meaningful change rather than debating its necessity.

If approved, the measure is expected to come into force globally by early 2027.