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SAFETY4SEA

Japan makes carbon tax proposal for shipping

by The Editorial Team
May 10, 2022
in Emissions
DNV methane slip

Credits: Shutterstock

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Japan informed the IMO that it will support a carbon tax to raise over $50bn a year, in order to address emissions from maritime transport.

According to a report from the Financial Times (FT), Japan’s proposal to the IMO is considered as one of the most significant by a shipping country.

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More specifically, Japan’s proposal suggests the industry should pay $56 per tonne of CO2 from 2025 to 2030, thus raising more than $50bn a year on shipping’s almost 1bn tonnes of emissions. In addition, Japan suggests increasing the costs every five years, up to $135 per tonne from 2030.

Until now, only the Marshall Islands and the Solomon Islands have proposed a meaningful financial incentive to decarbonise shipping, at $100 per CO2 tonne. In the meantime, ICS is supporting for a levy at the equivalent of 63 cents per CO2 tonne to create a research fund.

For their part, developing countries want any revenues raised from a carbon tax on shipping to be used to compensate them for the effects of climate change and any loss of trade. As for shipping, it wants to channel the funds back into paying for decarbonisation and needed infrastructure.

Furthermore, the FT reports that China, with the support of Argentina, Brazil, South Africa and the UAE, has suggested levying a charge on ships below a certain benchmark of carbon efficiency, as well as rewarding ships above a certain threshold.

However, activists are disappointed that the Japanese proposal only covered emissions produced on board ships and failed to cover emissions generated during the production of the fuels.

This means that fuels produced using hydrocarbons would be treated equally to those made using renewable sources of energy.

Japan makes carbon tax proposal for shippingJapan makes carbon tax proposal for shipping
Japan makes carbon tax proposal for shippingJapan makes carbon tax proposal for shipping
Tags: decarbonizationIMOJapanreducing shipping emissionsregulatory update cm
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