International Chamber of Shipping and 47 governments propose GHG emissions pricing mechanism
The International Chamber of Shipping (ICS) and 47 governments have made a joint submission to the final round of negotiations of the International Maritime Organization (IMO)’s Working Group on Reduction of GHG Emissions from Ships (ISWG-GHG), recommending the adoption of a maritime greenhouse gas (GHG) emissions pricing mechanism for international shipping.
International collaboration
The joint text is supported by major shipping nations such as Greece, Japan, Korea and the UK; the world’s largest flag states, including the Bahamas, Liberia, Marshall Islands and Panama; all EU states (and the European Commission); other African countries such as Nigeria and Kenya; plus small island developing states from the Caribbean and the Pacific.
The joint submission by governments sets out convergent regulatory text for amendments to the IMO MARPOL Convention, which will require companies operating ships on international voyages to make GHG contributions per ton of CO2e emitted to a new IMO GHG Strategy Implementation Fund.
This mature regulatory proposal will be considered by a critical IMO meeting in the week of February 17, 2025, at ISWG-GHG 18. If the MARPOL amendments are approved by IMO in April 2025, they should enter into force globally in early 2027, with the collection of annual GHG contributions from ships commencing in 2028.
Incentivizing shipping’s energy transition
The key purpose of this mandatory GHG charge will be to reduce the cost gap between zero/near-zero GHG emission (ZNZ) fuels (such as green methanol, ammonia and hydrogen) and conventional marine fuels, to incentivize the accelerated uptake of green energy sources. Revenue generated will be used to reward the production and uptake of ZNZ fuels while also providing billions of US dollars annually to support the maritime GHG reduction efforts of developing countries.
Guy Platten, the secretary general of the International Chamber of Shipping, commented, “The industry fully supports the adoption by IMO of a GHG pricing mechanism for global application to shipping. The joint text put forward by this broad coalition is a pragmatic solution and the most effective way to incentivize a rapid energy transition in shipping to achieve the agreed IMO goal of net zero emissions by or close to 2050. We are very pleased that such a large and diverse group of nations now firmly supports a common approach to maritime carbon charging. This proposed joint text has been hard fought and is broadly based on ideas that ICS has been advocating for the past 10 years.
“While a large number of governments now support a universal flat rate GHG contribution by ships – or something similar – a minority of governments continue to have concerns. Working in cooperation with all IMO member states we will do our best to allay such concerns during the final stages of these critical negotiations about regulatory text.”
In related news, the International Chamber of Shipping (ICS) Publications recently released the second edition of Reducing Greenhouse Gas Emissions: A Guide to International Regulatory Compliance. This updated resource provides shipowners, operators and managers with guidance on navigating the increasingly complex regulatory landscape of maritime decarbonization. Click here to read the full story.
