Major nations agree on first-ever global fee on greenhouse gases with
plan that targets shipping
[April 12, 2025] By
JENNIFER McDERMOTT and SIBI ARASU
Many of the world’s largest shipping nations decided on Friday to impose
a minimum fee of $100 for every ton of greenhouse gases emitted by ships
above certain thresholds, in what is effectively the first global tax on
greenhouse gas emissions.
The International Maritime Organization estimates $11 billion to $13
billion in revenue annually from the fees, with the money to be put into
its net zero fund to invest in fuels and technologies needed to
transition to green shipping, reward low-emission ships and support
developing countries so they aren’t left behind with dirty fuels and old
ships. The thresholds set through the agreement will get stricter over
time to try to reach the IMO's goal of net zero across the industry by
about 2050.
The agreement, reached with the United States notably absent, is
expected to be formally adopted at an October meeting to take effect in
2027. The IMO, which regulates international shipping, also set a marine
fuel standard to phase in cleaner fuels.
Shipping emissions have grown over the last decade to about 3% of the
global total as vessels have gotten bigger, delivering more cargo per
trip and using immense amounts of fuel.
IMO Secretary-General Arsenio Dominguez said the group forged a
meaningful consensus in the face of complex challenges to combat climate
change and modernize shipping. The shipping industry is on track to meet
the net zero goal, he added.
Some environmentalists at the meeting called the agreement a “historic
decision” that doesn't go far enough. The fee doesn't drive enough
emission reductions and it won't raise enough revenue to help developing
countries transition to greener shipping, said Emma Fenton, senior
director for climate diplomacy at a U.K.-based climate change nonprofit,
Opportunity Green.
Fenton said the measure actually opens the door for a scenario where
ships can pay to pollute instead of decarbonize, because it could be
cheaper to simply absorb the fee than to make changes to reduce
emissions, like switching fuels.
“The IMO has made an historic decision, yet ultimately one that fails
climate-vulnerable countries and falls short of both the ambition the
climate crisis demands and that member states committed to just two
years ago," they said.
Other groups welcomed the agreement as a step in the right direction.
“By approving a global fuel standard and greenhouse gas pricing
mechanism, the International Maritime Organization took a crucial step
to reduce climate impacts from shipping. Member states must now deliver
on strengthening the fuel standard over time to more effectively
incentivize the sector’s adoption of zero and near-zero fuels, and to
ensure a just and equitable energy transition,” said Natacha Stamatiou
of the Environmental Defense Fund.
The previous day, delegates approved a proposal to designate an
emissions control area in the North-East Atlantic Ocean. Ships traveling
through the area will have to abide by more stringent controls on fuels
and their engines to reduce pollution. It will cover ships coming into
and leave ports in the North Atlantic, such as the United Kingdom,
Greenland, France and the Faroe Islands. It will oblige ships from North
America, Asia and many other destinations to reduce emissions, said Sian
Prior, lead adviser to the Clean Arctic Alliance.
The Marine Environment Protection Committee, which is part of the IMO,
has been in meetings all week in London and finalized its decision
Friday.
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Bulk carrier ship Pauline sails across the Bosphorus strait, in
Istanbul, Turkey, April 7, 2025. (AP Photo/Francisco Seco, File)
 One major issue during the meetings
was the way the fee would be charged. More than 60 countries entered
the negotiations pushing for a simple tax charged per metric ton of
emissions. They were led by Pacific island nations, whose very
existence is threatened by climate change.
Other countries with sizable maritime fleets — notably China,
Brazil, Saudi Arabia and South Africa — wanted a credit trading
model instead of a fixed levy. Finally, a compromise between the two
models was reached. The compromise is in the ambition of the
measure, since the fee is not a universal levy on all emissions.
The IMO aims for consensus in decision-making, but in this case had
to vote. Sixty-three nations, including China, Brazil, South Africa
and many European states, approved the agreement. Led by Saudi
Arabia, 16 opposed. And 24 nations, including a group from the
Pacific Islands, abstained. Ministers from the island nations said
they refused to support an agreement that would “do too little, too
late to cut shipping emissions and protect their islands,” and will
try to strengthen it at the October meeting.
“We came as climate vulnerable countries— with the greatest need and
the clearest solution. And what did we face? Weak alternatives from
the world’s biggest economies,” Simon Kofe, Tuvalu's minister for
transport, energy, communication and innovation, said in a
statement.
Brazil’s negotiator, who wasn’t identified by name in a livestream
of the closing, said the agreement isn’t intended to be perfect
because each nation would have a different answer on what would be
perfect. But he said nations listened to each other and came up with
a framework to address climate change in an extremely challenging
geopolitical environment.
The United States didn’t participate in the negotiations in London
and urged other governments to oppose the emission measures being
considered. The Trump administration said it would reject any
efforts to impose economic measures against its ships based on
emissions or fuel choice, which it said would burden the sector and
drive inflation. It threatened possible reciprocal measures if any
fees are charged.
When asked about the United States' position in a press conference,
Secretary-General Dominguez said large ships traveling between
different countries are obliged to comply with the IMO's
regulations. He said nations with concerns should engage with the
IMO, to move forward together.
Dominguez also addressed concerns that the targeted reductions in
carbon intensity for fuels aren't strict enough to reduce the use of
liquefied natural gas as a marine fuel, which emits greenhouse gases
when burned. He said it's a “transition fuel,” or a bridge to
cleaner fuels, and the IMO will continue to look at its
environmental impacts in addressing its use.
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