The United Nations shipping agency is on the cusp of introducing binding regulations to phase out fossil fuel use in global shipping — with the world’s first-ever global emissions levy on the table.
The International Maritime Organization (IMO) will this week hold talks at its London headquarters to hammer out measures to reduce the climate impact of international shipping, which accounts for around 3% of global carbon emissions.
Some of the measures on the table include a global marine fuel standard and an economic element, such as a long-debated carbon levy or a carbon credit scheme.
If implemented, a robust pricing mechanism in the shipping sector would likely be considered one of the climate deals of the decade.
An ambitious carbon tax is far from a foregone conclusion, however, with observers citing concerns over sweeping U.S. tariffs, a brewing global trade war and reluctance from members firmly opposed to any kind of levy structure.
Sara Edmonson, head of global advocacy at Australian mining giant Fortescue, described the talks as “absolutely historic,” particularly given the potential for a landmark carbon levy.
“I think it would be an absolute game-changer. No other industry on a global level has made a commitment of this size and I would argue most countries haven’t made a commitment of this size,” Edmondson told CNBC via telephone.
She added, however, that “the jury is still very much out” when it comes to a global carbon price.
“There are also a lot of discussions around levy-like structures because obviously the word levy in very polarized countries like the U.S., like Australia and even in China, can be very challenging. But I think there are really good discussions around levy-like structures that would ultimately have an equivalent effect,” Edmondson said.
The IMO’s Marine Environment Protection Committee (MEPC) is scheduled to conclude talks on Friday.
