International Maritime Organization’s global emissions fee on shipping

On Friday, many of the world’s largest shipping nations decided to impose a minimum fee of $100 for every ton of greenhouse gases emitted by ships above certain thresholds, effectively the first global tax on greenhouse gas emissions.

The International Maritime Organization estimates $11 billion to $13 billion in revenue annually from the fees. The money will be put into its net-zero fund to invest in fuels and technologies needed to transition to green shipping, reward low-emission ships, and support developing countries so they aren’t left behind with dirty fuels and old ships. The thresholds set through the agreement will get stricter over time to reach the IMO’s goal of net zero across the industry by about 2050.

The agreement, reached with the United States notably absent, is expected to be formally adopted at an October meeting to take effect in 2027. The IMO regulates international shipping and sets a marine fuel standard to phase in cleaner fuels.

Shipping emissions have grown over the last decade to about 3% of the global total as vessels have increased, delivering more cargo per trip and using immense fuel.

IMO Secretary-General Arsenio Dominguez said the group forged a meaningful consensus in the face of complex challenges to combat climate change and modernize shipping. He added that the shipping industry is on track to meet the net-zero goal.

Some environmentalists at the meeting called the agreement a “historic decision” that doesn’t go far enough. The fee doesn’t drive enough emission reductions, and it won’t raise enough revenue to help developing countries transition to greener shipping, said Emma Fenton, senior director for climate diplomacy at Opportunity Green, a U.K.-based climate change nonprofit.

Fenton said the measure opens the door for ships to pay to pollute instead of decarbonize, because it could be cheaper to absorb the fee than to make changes to reduce emissions, like switching fuels.

“The IMO has made a historic decision, yet ultimately one that fails climate-vulnerable countries and falls short of both the ambition the climate crisis demands and that member states committed to just two years ago,” they said.

Other groups welcomed the agreement as a step in the right direction.

“By approving a global fuel standard and greenhouse gas pricing mechanism, the International Maritime Organization took a crucial step to reduce climate impacts from shipping. Member states must now deliver on strengthening the fuel standard over time to more effectively incentivize the sector’s adoption of zero and near-zero fuels, and to ensure a just and equitable energy transition,” said Natacha Stamatiou of the Environmental Defense Fund.

The previous day, delegates approved a proposal to designate an emissions control area in the Northeast Atlantic Ocean. Ships traveling through the region must abide by more stringent controls on fuels and their engines to reduce pollution. The area will cover vessels entering and leaving North Atlantic ports, such as the United Kingdom, Greenland, France, and the Faroe Islands. It will oblige ships from North America, Asia, and many other destinations to reduce emissions, said Sian Prior, lead adviser to the Clean Arctic Alliance.

The Marine Environment Protection Committee, part of the IMO, has been in meetings all week in London and finalized its decision on Friday.

One major issue during the meetings was how the fee would be charged. Over 60 countries entered the negotiations, pushing for a simple tax charged per metric ton of emissions. They were led by Pacific island nations, whose existence is threatened by climate change.

Other countries with sizable maritime fleets—notably China, Brazil, Saudi Arabia, and South Africa—wanted a credit trading model instead of a fixed levy. Finally, a compromise between the two models was reached. The compromise is in the measure’s ambition since the fee is not a universal levy on all emissions.

The IMO aims for consensus in decision-making, but in this case, had to vote. Sixty-three nations approved the agreement, including China, Brazil, South Africa, and many European states. Led by Saudi Arabia, 16 opposed. And 24 countries, including a group from the Pacific Islands, abstained. Ministers from the island nations said they refused to support an agreement that would “do too little, too late to cut shipping emissions and protect their islands,” and will try to strengthen it at the October meeting.

“We came as climate vulnerable countries— with the greatest need and the clearest solution. And what did we face? Weak alternatives from the world’s biggest economies,” Simon Kofe, Tuvalu’s minister for transport, energy, communication, and innovation, said in a statement.

Brazil’s negotiator, who wasn’t identified by name in a live stream of the closing, said the agreement isn’t intended to be perfect because each nation would have a different answer on what would be ideal. But he noted that nations listened to each other and devised a framework to address climate change in a highly challenging geopolitical environment.

The United States didn’t participate in the negotiations in London and urged other governments to oppose the emission measures being considered. The Trump administration said it would reject any efforts to impose economic measures against its ships based on emissions or fuel choice, burdening the sector and driving inflation. It threatened possible reciprocal measures if any fees are charged.

When asked about the United States’ position in a press conference, Secretary-General Dominguez said large ships traveling between different countries must comply with the IMO’s regulations. He said nations with concerns should engage with the IMO to move forward.

Dominguez also addressed concerns that the targeted reductions in carbon intensity for fuels aren’t strict enough to reduce the use of liquefied natural gas as a marine fuel, which emits greenhouse gases when burned. He said it’s a “transition fuel,” or a bridge to cleaner fuels, and the IMO will continue to look at its environmental impacts in addressing its use.

https://apnews.com/article/shipping-emissions-climate-change-98ff23ca4739d8b4fc5a8f941a7ca0c4