Summary of International Maritime Organization’s Discussions on GHG Emissions
Currently, a significant meeting is underway in London, focused on advancing the global maritime sector toward achieving a mid-century net-zero greenhouse gas (GHG) emissions target. This week, the International Maritime Organization’s (IMO) Intersessional Working Group on GHG Reduction (ISWG-19) is exploring options to price emissions from fossil fuel usage in maritime operations.
The discussions aim to clarify positions on three primary carbon pricing options: a crediting mechanism, a ‘strong’ levy, and a ‘weak’ levy. This debate sets the stage for a broader meeting of the Marine Policy Environment Committee (MEPC) next week, which will delve into carbon pricing alongside two other significant tracks: establishing a Carbon Intensity Indicator for ship efficiency standards and implementing a green fuel standard to lower the GHG intensity of marine fuels.
Carbon Pricing Mechanisms
All three proposed carbon pricing options rest on a Global Fuel Standard that dictates the maximum GHG intensity permissible over time, measured in CO2 equivalent per gigajoule of energy for maritime fuels. The ongoing discussions are part of a lengthy process initiated by the UN’s maritime arm to address the sector’s GHG emissions, owing to its exclusion from the Kyoto Protocol and subsequent climate agreements, which instead delegated regulatory authority to the IMO and the International Civil Aviation Organization.
Aviation has already adopted a carbon pricing scheme known as the Corsia decarbonization system. In contrast, shipping has yet to finalize a pricing approach. Recent observations indicate a shift in the EU’s position that aligns with a compromise “bridging proposal” favoring a credit mechanism. This change comes with backing from several countries, including Singapore, China, and Brazil. If the EU supports the credit mechanism, analysts suggest that the levy option may be sidelined in favor of this approach.
Perspectives on Carbon Pricing Options
Environmental NGO Seas At Risk notes that while the levy offers an equitable solution, the credit trading mechanism could facilitate an energy transition, particularly for zero or near-zero GHG emission fuels expected to be produced mainly in developing nations. However, concerns about revenue instability and market unpredictability linger. Most smaller and poorer developing countries advocate for the non-carbon credit levy, arguing it could generate approximately $1,500 billion by 2050, compared to only $150 billion projected under a credit mechanism.
Urgency for Agreement
Reaching a consensus in the coming weeks is critical, as the IMO aims to meet an October 2025 deadline for agreeing on mid-term measures as part of its revised GHG Strategy established in 2023. The maritime industry currently accounts for about 2% of global GHG emissions, and the IMO’s target to achieve net-zero “around” 2050 includes non-binding interim targets for 2030 and 2040.
While some refined proposals for mid-term measures have garnered support, experts caution that definitive breakthroughs may not occur this year. Delays extending into 2026 or beyond could push decisions close to three decades after the Kyoto talks transitioned responsibility for maritime GHG emissions to the IMO. Additionally, the implementation of adopted measures may take effect 16 months after MEPC approval, under a “tacit acceptance” procedure, emphasizing the pressing need for timely actions within the maritime sector.
