Full steam ahead, or steady as she goes?
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Negotiations on a global carbon levy for shipping are expected to come to a head over the next fortnight.
The idea for a global carbon levy first surfaced in 2021, but discussions really gained momentum two years later. In July 2023 the International Maritime Organisation (IMO) adopted a revised strategy to drastically cut greenhouse gas emissions from shipping.
Governments representing the 176 IMO member nations agreed to cut shipping emissions by at least 20% compared to 2008 levels by 2030, at least 70% by 2040, and to reach net zero emissions around 2050. Nations agreed that shipping needed a “GHG emission pricing mechanism” to meet the IMO’s climate targets, committing in principle to finalising negotiations in April 2025.1
The Marine Environmental Protection Committee (MEPC) will be held on 7th-11th April. If everything goes to plan, whatever “pricing mechanism” they agree on will be formally adopted by the IMO in October, before coming into force in 2027. Earlier meetings revealed a majority in favour of a carbon levy. In February, over 50 countries, accounting for ~70% of the worlds fleet and including shipping reliant nations such as Panama and Liberia, voiced their support for a global carbon levy, in combination with a global fuel standard.
Seas apart
It’s worth noting that although the IMO is a branch of the United Nations, global shipping emissions are excluded from the 2015 Paris Agreement. The reason relates to shipping’s notoriously complex ownership structures: ships are often registered in one of a handful of small countries, owned in another country, but commissioned by another country or unrelated entity entirely.
In contrast to other global climate policies the immediate threat that Trumps disrupts the IMO process is thought to be limited; even under the Biden administration the US had fallen into a camp of countries deemed unhelpful to progressing maritime climate policies. Nevertheless, the path to a global carbon levy is not going to be plain sailing, and the threat lies not with the US, but elsewhere.