Shipping Industry Pushes for Global Greenhouse Gas Fee

In a significant move towards sustainable shipping, nearly 200 shipping companies have called on the world’s largest maritime nations to adopt regulations that would implement the first-ever global fee on greenhouse gas emissions. This initiative aims to substantially reduce emissions within the sector.

The Getting to Zero Coalition’s Call to Action

The Getting to Zero Coalition, an alliance comprising various companies, governments, and intergovernmental organizations, is urging member states of the International Maritime Organization (IMO) to support these crucial regulations during their upcoming meeting in London next month. The coalition views this as a pivotal moment for sustainable shipping and believes that industry voices advocating for the adoption of these regulations should be amplified.

Jesse Fahnestock, who leads decarbonization efforts for the Global Maritime Forum, emphasized the importance of this impending political decision, stating, “Given the significance of the political decision being made, we think it is important that industry voices in favor of this adoption be heard.”

U.S. Opposition and Potential Conflicts

However, the proposal has met with strong resistance from the Trump administration, which has expressed unequivocal rejection of the initiative. In a joint statement, U.S. Secretaries of State, Commerce, Energy, and Transportation labeled the proposed regulatory framework as “effectively a global carbon tax on Americans levied by an unaccountable U.N. organization.” They have warned of potential retaliation against countries that support the proposal, creating a contentious backdrop to the upcoming negotiations.

Despite federal opposition, U.S.-based shipping companies have expressed their support for the initiative. Kathy Metcalf, the president emeritus of the Chamber of Shipping of America, voiced a desire for a unified global system rather than fragmented regional systems that could lead to double charging for emissions.

The Need for Decarbonization

Shipping emissions have reached about 3% of the global total, a percentage that has risen over the past decade as vessels have increased in size and reliance on fossil fuels. The IMO has set ambitious targets for the sector to achieve net-zero greenhouse gas emissions by 2050, committing to the wider adoption of fuels that have zero or near-zero emissions.

In April, member states concurred on the framework to set a minimum fee for each ton of greenhouse gases emitted by ships exceeding certain thresholds and to establish a marine fuel standard designed to phase in cleaner fuel alternatives. While the IMO aims for consensus in decision-making, this particular issue may require a vote, notably in which the U.S. did not participate.

Next Steps: A Crucial Decision Ahead

Nations will soon need to determine whether these regulations will come into force by 2027. If successful, the regulations will be mandatory for large oceangoing vessels over 5,000 gross tonnage, which account for 85% of the total carbon emissions from international shipping.

Delaine McCullough, president of the Clean Shipping Coalition and director of the Ocean Conservancy shipping program, warned that failing to reach an agreement would delay the essential decarbonization of the shipping sector, jeopardizing global efforts to keep climate change at bay.

The Stakes for the Industry

The U.S. secretaries have signaled that they will take action against fellow IMO members if they move forward without U.S. support, claiming the proposed fuel standards are “unattainable” and would disproportionately advantage China in the development of cleaner fuels.

Despite U.S. opposition, a majority of countries appear to favor the regulations, according to Faig Abbasov from Transport and Environment, an environmental NGO based in Brussels. Abbasov noted that while the agreement reached in April may not be ambitious, it presents a critical opportunity to launch the shipping sector’s decarbonization journey.

Finally, shipping companies advocate for these regulations as they provide a stable framework necessary to invest in cleaner technologies. Alongside the Getting to Zero Coalition, the International Chamber of Shipping, which represents over 80% of the global merchant fleet, is pushing for these important reforms during the IMO meeting scheduled from October 14 to 17.