Shipping’s emission levy ‘dead in the water’? Not yet

GHG reduction targets and strategy are focus for week, not economic measures

A financial levy based on shipping’s emissions is ‘dead in the water’ according to some participants at the IMO’s marine environment protection committee meeting taking place in London.


The IMO member states have met to discuss how they will increase decarbonisation ambition of the industry and to look at proposed measures to achieve that goal. While there is now consensus on the ambition on achieving net zero emissions by 2050 the option of an economic measure remains uncertain.


During plenary statements by member states, which took a day and a half of the five day meeting, many developing countries made their concerns of a levy clear, most using the same phrases of risks to those countries with distant markets where cargo voyages would be hit more and the risks to food security.


The similar statements came after the UK’s Financial Times revealed earlier in the week that China had distributed what it called a diplomatic note to leading developing countries about the risks of a levy.


Many European countries, such as France, are supportive of a levy, as are the least developed countries and small island developing states which expect to benefit with funds that a levy could raise.


However delegates from other developed countries have expressed their concern that there is now too much opposition to the levy proposal for it to be shortlisted, saying it is ‘dead in the water’ pointing to the other options on the table as being more palatable. 


It has to be noted that a financial decision about the economic measure, whether a levy, feebate or trading mechanism, will not be made at this 80th meeting of MEPC. 


The decision has been made regarding the levels of ambition and the so-called indicative checkpoints for 2030 and 2040, and the next steps will be the development of an impact assessment of the range of proposals at the IMO for economic measures that will form the ‘basket of measures’.


While it is expected that most member states will take a short summer break, delegates have told Fathom World that a steering group will be quickly formed to assess the existing range of proposals and work on how to have them assessed.


It is largely expected that UNCTAD, or an organisation like it, will be selected to do this.


Meanwhile the IMO is also looking at how current technical measures such as the CII, EEDI and EEXI can be reviewed. These are the technical solutions that detail how vessels can be designed, built and operated to be energy efficient and therefore emit lower greenhouse gs emissions. There are also ongoing talks about the ongoing collection of fuel volumes form vessels, a key tool for any eventual economic measure.


A lobby group communications agency contacted Fathom World and said it believed the following either supported or were against the idea of a levy:


Over 70 countries have previously endorsed a global shipping levy, and
23 countries opposed the levy at the IMO in June/July, citing concerns over potential impacts on trade.


They are Brazil, Argentina, China, Peru, Chile, Uruguay, South Africa, Guatemala, Paraguay, Australia, Thailand, Cuba, Venezuela, Bangladesh, Belarus, Venezuela, UAE, Nicaragua, Colombia, Indonesia, Russia, Ecuador, Saudi Arabia. 


Fact sheets on the candidate economic measures.


Universal Mandatory Greenhouse Gas Levy



Global Fuel Standard


Combination of Fuel Standard with Levy


Emission Cap and Trade System


Share article:

Dedicated topic pages >>

Other news >>


Stay On Top Of The Transformation Of The Shipping And Maritime Sectors With Our Weekly Email Newsletter.