Following a week of intensive greenhouse gas (GHG) negotiations at the UN International Maritime Organization (IMO), Guy Platten, Secretary General of the International Chamber of Shipping (ICS), emphasized the need for urgent progress ahead of the critical IMO Marine Environment Protection Committee (MEPC 83) in April.
In a statement released after the conclusion of ISWG-GHG 18, which took place from 17-21 February 2025, Platten stated:
While ICS is broadly satisfied with the progress on a radical new package of global GHG reduction regulations, including a GHG emissions pricing mechanism, much work remains. Despite divergences, it is encouraging that negotiations continue in a positive and cooperative spirit.
With only six weeks remaining before MEPC 83, ICS remains confident that IMO Member States will reach an agreement and approve fit-for-purpose amendments to the MARPOL Convention.
This week’s discussions have provided further momentum to finalize a carbon levy in April and adopt it in October, potentially making it the world’s first universal fee on an international polluter. A successful deal would revitalize international cooperation within UN forums ahead of COP.
Universal carbon levy on GHG emissions
Several countries have aligned on a global carbon levy, with 48 states from the Caribbean, Pacific, Africa, Asia, and Europe—representing a majority of the world’s shipping fleet—agreeing on a levy within the range of $18-150/tonne of GHG emissions. Dominica, Senegal, and Switzerland supported a levy for the first time. An additional 13 countries, including Georgia, Grenada, Kiribati, Malawi, Mexico, Namibia, Nauru, New Zealand, Trinidad and Tobago, and Türkiye, also back the measure.
Although no final agreement has been reached, the shipping industry supports a universal levy as the best mechanism to accelerate the transition to net-zero emissions by 2050.
Approximately three-quarters of IMO Member States strongly support the GHG contribution system proposed by the ‘50-plus group’ of governments and ICS. However, concerns raised by a significant minority, including China and Brazil, must be addressed pragmatically to achieve full consensus.
Agreement on IMO fund
A major positive outcome is the broad agreement to establish an IMO Fund, a concept long championed by ICS. This fund—expected to generate billions of dollars annually from ship emissions charges—will provide financial incentives for early adopters and ships using zero and near-zero (ZNZ) fuels such as green methanol, biomethane, green ammonia, and sustainable biofuels.
These incentives are crucial for bridging the cost gap with conventional fuels and encouraging the adoption of new energy sources.
GHG fuel standard
Details remain unresolved regarding the proposed GHG intensity fuel standard. However, ICS is pleased that its simpler proposal for GHG surcharge fees—applicable to ships unable to comply due to fuel availability constraints—remains under consideration.
Developing countries broadly support a simpler, more transparent approach rather than a complex system requiring compliance unit trading with unpredictable pricing. A key issue for shipowners is whether pooled compliance among different shipping companies will be permitted, given the limited availability of compliant marine fuels.
The global fuel standard (GFS) aims to drive the adoption of zero-emission energy sources in shipping, with the goal of fully decarbonizing the sector by 2050. Ahead of this week’s discussions, Transport & Environment (T&E) and over 60 conservation NGOs called for the exclusion of biofuels from shipping’s future energy mix.
Key questions regarding the levy’s price, scope, and revenue distribution, as well as GFS details, remain unresolved.
Urgent need for a pragmatic solution
To ensure progress, ICS will continue to propose constructive solutions, particularly on economic incentives for ZNZ fuels. Platten emphasized that achieving consensus is essential to meeting the revised GHG Reduction Strategy, adopted in 2023.
The IMO is set to finalize carbon pricing negotiations from April 7-11 and adopt it in autumn 2025 to meet global climate commitments.
Blánaid Sheeran, Policy Officer for Climate Diplomacy at Opportunity Green, noted that while confidence remains in IMO Member States meeting their timeline, significant work is needed, particularly on economic measures. While over 50 countries support a levy on shipping’s GHG emissions, a strong and equitable pricing mechanism is not yet guaranteed.
Christiaan De Beukelaer, Senior Lecturer at the University of Melbourne, highlighted that a diverse coalition of countries now backs a shipping levy, marking a significant step for climate action. However, major fossil fuel-subsidizing nations, including Brazil—despite its leadership in climate discussions—continue to obstruct progress, raising concerns about their influence in delaying key reforms.
Expert economists at UNCTAD argue that a levy is the most effective mechanism for facilitating the shipping industry’s energy transition at the lowest cost while generating revenue for climate adaptation and mitigation.
The World Bank estimates that a levy of $100/tonne of GHG emissions could generate up to $60 billion annually. However, the allocation of these revenues—particularly how much should be directed to developing and climate-vulnerable countries—remains a key point of debate at the IMO.
This week, the IMO’s 176 member states convened in London for an intersessional round of negotiations (ISWG-GHG 18) ahead of the crucial summit in April (MEPC 83).
