Global Shipping's Carbon Pricing Revolution: IMO Enters Crucial Negotiation Stage

The International Maritime Organization (IMO) is gearing up to roll out a groundbreaking global emissions pricing system, marking a first for any industry. This pivotal moment will unfold during the Marine Surroundings protection Committee (MEPC 83) meeting in London from April 7-11, 2025. With around 1,000 delegates participating in the preparatory discussions led by the Intersessional Working Group on GHG Emissions, anticipation is high.At the heart of these talks lies the IMO Net-Zero Framework.This initiative aims to amend MARPOL Annex VI through two main strategies: introducing a goal-based marine fuel standard and establishing an economic mechanism for maritime greenhouse gas emissions pricing. Given that MARPOL Annex VI currently includes 108 Parties representing nearly all of global merchant shipping tonnage—97.3%—the implications could be significant.

Ambassador Albon Ishoda from the Marshall Islands has voiced concerns about equity in these negotiations: “Countries from Africa, Central America, and other regions are pushing for fairness and ambition for the Global South, yet our perspectives often go unheard.”

Tensions have surfaced among key stakeholders; while nations from regions like Africa and Latin America push for a strong levy system with support from the UK, criticism has been directed at the european Union for softening its stance. Initially proposing a $100 levy that could yield $60 billion annually, they’ve now shifted to backing a less enterprising plan targeting only $30 billion—a move that raises questions about its effectiveness.

Interestingly enough, China and India are stepping up their game by advocating for stable revenue generation that may even exceed EU ambitions regarding policy design.

A study by UNCTAD commissioned by IMO suggests implementing a levy between $150-$300 per tonne of greenhouse gases as an optimal strategy to balance economic impacts on global GDP growth while fostering equality across nations. However, Christopher Wiernicki of American Bureau of Shipping warns that “the success of this carbon levy hinges on its implementation.” The current uncertainty surrounding potential rates—from as low as $18 to as high as $150 per ton—is causing market jitters.

The IMO’s revised strategy sets bold targets: aiming to cut shipping’s carbon intensity by 40% compared to levels seen in 2008 by 2030 and ensuring that between 5-10% of energy comes from zero or near-zero GHG sources within this timeframe—all leading towards net-zero emissions by mid-century.

Once MEPC 83 gives its nod of approval next year, further deliberations will take place before final adoption at an extraordinary session planned for October 2025.If all goes smoothly under what’s known as “tacit acceptance,” these measures could kick off in 2027.

Additionally, this meeting will tackle other pressing environmental issues such as creating guidelines for measuring methane and nitrous oxide emissions produced by marine diesel engines and laying down regulations concerning onboard carbon capture technologies.

For those keen on staying updated with these developments firsthand—mark your calendars! High-ambition country delegates will host a press conference along with Q&A sessions at IMO HQ on Monday afternoon at 1:30 PM local time.

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