Global Shipping Emissions Levy
The maritime industry is undergoing changes to address climate change. The International Maritime Organization’s Marine Environment Protection Committee recently voted on a new emissions levy. This decision marks a very important moment in global shipping regulations. The proposed Market-Based Measure (MBM) aims to balance environmental needs with economic fairness.
Key Proposals at MEPC-83
Five major proposals were discussed at the meeting. The International Chamber of Shipping suggested a fixed levy for each tonne of CO₂ emitted. China proposed a market-driven approach allowing ships to trade compliance units. The European Union recommended a fixed greenhouse gas levy managed by an IMO fund. India offered a ‘bridging mechanism’ targeting under-compliant ships while rewarding those using zero or near-zero fuels. Singapore enhanced India’s model with a GHG Fuel Standard and a tiered system for emissions.
Voting Outcome and Next Steps
The MEPC-83 voted 63 to 16 in favour of Singapore’s hybrid model as the Net Zero Framework. This makes international shipping the first global industry to adopt a mandatory emissions levy. However, the decision is not final. It requires amending Annex VI of the MARPOL convention, which will undergo a six-month review. A two-thirds majority is needed for final adoption. Currently, the outcome remains uncertain due to abstentions and potential objections from member states.
National Interests and Geopolitical Tensions
The meeting brought into light the clash of national interests in climate diplomacy. Oil-exporting countries resisted transitions to green fuels. Small island nations pushed for higher carbon levies to fund green initiatives. Meanwhile, large shipping nations advocated for minimal levies to maintain competitiveness. The diverse positions reflect the challenges the IMO faces in achieving a universally acceptable emissions framework.
Importance of Green Shipping
Shipping is responsible for about 2.8% of global greenhouse gas emissions, making it contributor to climate change. Without intervention, emissions could rise drastically by 2050. The IMO has been implementing measures since 2011 to reduce emissions. Targets include a 40% reduction in carbon intensity by 2030 and net-zero emissions by 2050, aligning with global climate goals.
Equity in Climate Responsibility
The principle of ‘common but differentiated responsibilities’ is being challenged in recent discussions. Wealthier nations are perceived to be shifting the burden onto developing countries. This raises concerns about equity in climate action and the historical responsibilities of developed nations.
India’s Position and Future Prospects
India faces short-term challenges from the new MBM framework but stands to benefit in the long run. The impact on maritime logistics costs will be manageable. India’s investment in green hydrogen positions it well for future opportunities in clean energy exports. This aligns with the IMO’s reward thresholds for greenhouse gas emissions, creating a pathway for India to become a global hub for green fuels.
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