47 Governments and Global Industry Jointly Propose Text for GHG Emissions Pricing Mechanism for International Shipping

(International Chamber of Shipping) 47 governments from all over the world, with shipping industry support, set out MARPOL Convention text for annual contribution by ships, per tonne of GHG emitted, to multi-billion-dollar International Maritime Organization (IMO) fund.

9 January 2025, London: To achieve net zero greenhouse gas (GHG) emissions from international shipping by 2050, the International Chamber of Shipping (ICS) has joined 47 governments in a joint submission to the final round of negotiations at the United Nations’ International Maritime Organization (IMO) to adopt a maritime greenhouse gas (GHG) emissions pricing mechanism for international shipping.

The joint text is supported by major shipping nations such as Greece, Japan, Korea and the United Kingdom, the world’s largest flag States including 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 shipping companies operating ships on international voyages to make GHG contributions per tonne of CO2e emitted to a new “IMO GHG Strategy Implementation Fund”.

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 incentivise the accelerated uptake of green energy sources. Revenue generated will be used to reward the production and uptake of ZNZ fuels, whilst also providing billions of US dollars annually to support the maritime GHG reduction efforts of developing countries.

“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 incentivise 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 which ICS has been advocating for the past ten 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 co-operation 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.”

This mature regulatory proposal will be considered by a critical IMO meeting in February (in the week of 17 February 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.

The joint proposal to IMO for a maritime GHG emissions pricing mechanism can be found here.

The quantum of the GHG contribution per tonne of CO2e emitted has not yet been agreed by IMO Member States, but is expected to fall within a range equivalent to between USD 60 and up to USD 300 per tonne of conventional marine fuel oil consumed, depending on the agreed reward rate for the use of zero/near-zero GHG marine fuels and the level of revenue to be allocated annually to support developing countries.

Austria, Bahamas, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Fiji, Finland, France, Georgia, Germany, Greece, Hungary, Ireland, Italy, Jamaica, Japan, Kenya, Latvia, Liberia, Lithuania, Luxembourg, Malta, Marshall Islands, Montenegro, Netherlands, Nigeria, Palau, Panama, Poland, Portugal, Republic of Korea, Romania, Slovakia, Slovenia, Solomon Islands, Spain, Sweden, Seychelles, Tonga, Tuvalu, Ukraine, United Kingdom, Vanuatu, the European Commission, International Chamber of Shipping (ICS).

The International Chamber of Shipping (ICS) is the principal global trade association for merchant shipowners and operators, representing all sectors and trades and over 80% of the world’s merchant fleet – www.ics-shipping.org READ MORE