SIMIC

NEARLY 50 countries, including the EU, Canada, and Pacific island nations allegedly most affected by climate change, are proposing to tax carbon emissions in shipping, reports London's OilPrice.com

But other nations are opposed to such charges, according to documents from ongoing talks reviewed by Reuters.



The UN's International Maritime Organisation (IMO), is holding meetings this month to discuss ways of cutting greenhouse gas (GHG) emissions from ships in London.



These include talks on economic GHG pricing mechanisms and technical fuel standards. In 2022, international shipping accounted for about two per cent of global energy-related CO2 emissions, according to data from the International Energy Agency (IEA).



Last year, IMO set out in its strategy indicative targets to reduce the total annual GHG emissions from international shipping by at least 20 per cent, striving for 30 per cent, by 2030, compared to 2008 levels.



These emissions are targeted to decrease by at least 70 per cent, striving for 80 per cent by 2040, compared to 2008. IMO also aims to reach net-zero GHG emissions by or around 2050.



The IEA said last year that while the emissions reduction targets "are now in line with the goals set out in the Paris Agreement, legally binding measures for the implementation of the revised strategy will be needed to steer the maritime shipping sector onto a trajectory consistent with the Net Zero Emissions by 2050 (NZE) Scenario, which requires an almost 15 per cent reduction in emissions from 2022 to 2030."



This month's talks have seen so far the European Union, Canada, Japan, and Pacific nations such as Vanuatu and the Marshall Islands propose a tax for each ton of greenhouse gas emissions.



The tax, they argue, would raise over US$80 billion each year, which could go to helping emerging economies in the energy transition and developing low-carbon shipping fuel alternatives, per the documents seen by Reuters.



But China, Brazil, and many others disagree with a charge on shipping emissions. Instead, they propose a limit to global fuel emissions intensity, above which financial penalties could be incurred.



Countries are still seeking to reach a compromise that would be applied globally to avoid regulations on a national level which would be a headache for everyone involved in shipping.