Member states of the International Maritime Organization (IMO) have agreed on the need to impose a carbon price on shipping emissions. The countries reached a consensus at the Intersessional Working Group meeting last week, marking a “significant breakthrough” in more than a decade.
Decarbonization measures on the table can be divided into two categories, including technical ones such as fuel standard, and economic ones like global carbon tax. This is expected to be discussed at the organization’s environmental committee meeting next month.
The shipping sector release around one billion tonnes of carbon dioxide each year, accounting for nearly 3% of world emissions. The industry’s emissions are expected to reach 90-130% of their 2008 levels by 2050 if the industry doesn’t take further action.
In the past, major emerging economies have vigorously opposed carbon tax plans. However, a proposal by Pacific Island nations for a carbon price of US$100 per tonne on bunker fuels previously received support from EU countries and the U.S.
At the working group meeting last week, all EU countries and the U.S. spoke in favor of carbon pricing, with the U.K., New Zealand, and the Bahamas supporting the plan for the first time.
“There can finally be no doubt that we will put a carbon price on shipping,” said Aoife O’Leary, a long-time IMO observer and the head of Opportunity Green, a non-profit focused on international climate issues.
According to O’Leary, the price must be high enough to accelerate the transition to zero-emission fuels while also providing a mechanism to help developing countries.
The Marshall Islands and the Solomon Islands have proposed a carbon tax of US$100 per tonne on bunker fuels, while Maersk, the world’s largest container shipping operator, has proposed a US$150 fee to encourage the sector to convert to cleaner fuels.
The European Parliament’s Environment, Public Health and Food Safety committee approved last week the Fit for 55 package, which includes putting ships into the EU’s emissions trading mechanism (ETS).
This means that, regardless of flag, all ships transporting goods to and from the EU will be charged on their emissions. Three-quarters of the proceeds from the auction of allowances will be invested in an Ocean Fund to help the industry decarbonize.
