By Chinedum Uwaegbulam
Diplomats at the UN’s International Maritime Organization (IMO) have agreed to the world’s first-ever carbon pricing mechanism applied to a major polluting industry – global shipping.
At the IMO headquarters in London on Friday, countries voted during the closing plenary to adopt a global framework that will put a carbon price on shipping emissions that will help the industry decarbonise and encourage the use of cleaner technologies. The overall policy is expected to be formally adopted in October 2025, though several technical details remain unresolved.
The tax will generate $30–40 billion in revenues by 2030, roughly $10 billion yearly. The agreement is projected to deliver at best 10 per cent absolute emissions reduction in the shipping sector by 2030; far short of the IMO’s own targets set in their 2023 revised strategy, which calls for at least a 20 per cent cut by 2030, with a stretch goal of 30 per cent.
The funds will be ring fenced for decarbonising the maritime sector alone and not go towards climate financing for developing countries.
Starting from 2028, ships will be required either to transition to lower-carbon fuel mixes or pay for the excess emissions they generate. Vessels that continue to burn conventional fossil fuels will face a $380 per tonne fee on the most intensive portion of their emissions, and $100 per tonne on remaining emissions above a certain threshold.
The policy which was backed by 63 countries including Brazil, China, the EU, South Africa, Kenya and others.
Senegal and Namibia, sets a global precedent: Despite objections from petro-states like Saudi Arabia, the UAE, Russia, and Venezuela – who opposed both the substance and the procedure of the agreement – Norway’s compromise proposal, as the Chair of the IMO, passed in the final vote.
At UN climate talks in Baku in November 2024, countries agreed to a post-2025 $1.3 trillion climate finance deal to support developing countries in the energy transition. Countries are looking to public, private and innovative sources of finance to close the climate finance gap.
