Nations Divided Over Fees on Shipping Industry Emissions

Nearly 50 countries, including the EU, Canada, and Pacific island nations most affected by climate change, are proposing a fee on carbon emissions in the shipping industry, while others are opposed to such charges, according to documents from ongoing talks reviewed by Reuters.

The United Nations agency, the International Maritime Organization (IMO), is holding this month's meetings to discuss ways of cutting greenhouse gas (GHG) emissions from ships, including talks on economic GHG pricing mechanisms and technical fuel standards.

In 2022, international shipping accounted for about 2% of global energy-related CO2 emissions, according to data from the International Energy Agency (IEA).

Last year, IMO set out in its strategy indicative targets to reduce the total annual GHG emissions from international shipping by at least 20%, striving for 30%, by 2030, compared to 2008 levels. These emissions are targeted to decrease by at least 70%, striving for 80%, by 2040, compared to 2008. IMO also aims to reach net-zero GHG emissions by or around 2050.

The IEA said last year that while the emissions reduction targets “are now in line with the goals set out in the Paris Agreement, legally binding measures for the implementation of the revised strategy will be needed to steer the maritime shipping sector onto a trajectory consistent with the Net Zero Emissions by 2050 (NZE) Scenario, which requires an almost 15% reduction in emissions from 2022 to 2030.”

This month’s talks have seen so far the European Union, Canada, Japan, and Pacific nations such as Vanuatu and the Marshall Islands propose a fee for each ton of greenhouse gas emissions. The fees, they argue, would raise over $80 billion each year, which could go to helping emerging economies in the energy transition and developing low-carbon shipping fuel alternatives, per the documents seen by Reuters.

But China, Brazil, and many others disagree with a charge on shipping emissions. Instead, they propose a limit to global fuel emissions intensity, above which financial penalties could be incurred, according to Reuters. 

Countries are still seeking to reach a compromise that would be applied globally to avoid regulations on a national level which would be a headache for everyone involved in shipping.

By Tsvetana Paraskova for Oilprice.com

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