A coalition of 47 nations, joined by the International Chamber of Shipping, have submitted a proposal to the International Maritime Organization that each ship should pay an annual greenhouse gas fee corresponding to the greenhouse gas emissions from fuel over the preceding calendar year.
Several of the nations, such as Panama, Liberia, and the Marshall Islands, among others, have a substantial amount of tonnage registered under their flags.
Funds paid would be submitted to an “IMO GHG Strategy Implementation Fund,” that would be set up and the levy could be set at one of three potential prices: USD$18.75, USD$100, or USD$150 per tonne of carbon dioxide equivalent emitted on a life cycle basis.
Further details would be set out in guidelines that would be later developed by the IMO.
The Fund would have a Board of Governors, who would be appointed by the Marine Environment Protection Committee, and would be balanced in terms of geographical and gender-related representation, with dedicated seats for Small Island Developing States and for Least Developed Countries.
The monies in the Fund would be used to implement the 2023 IMO Strategy on the Reduction of Greenhouse Gases from Ships (which sets a net zero target of CO2 from shipping) and the fund would be overseen by the IMO’s Marine Environment Protection Committee – one of the main institutions of the IMO.
Monies would be disbursed each year until the uptake of eligible fuels in international shipping reaches 30%, and, at the latest, by 2040, each ship using eligible fuels, shall receive, on request, an annual financial reward.
“The purpose of the annual reward shall be to bridge the price gap of eligible… with other fuels, to incentivize the uptake of eligible … in line with the 2023 IMO Strategy on Reduction of GHG Emissions from Ships, as it may be revised. The modalities and amount of the annual reward shall be determined taking into account guidelines adopted by the Organization,” the proposal reads.
The proponents of the measure have submitted their proposal to an IMO meeting in February this year.
Seven of the proponents, Liberia, Panama, the Marshall Islands, Malta, the Bahamas, Greece and Japan have about 58.4% of the world fleet’s deadweight tonnage under their flag. However, Article 16 of MARPOL states that amendments “shall be adopted by a two-thirds majority,” and that applies to the majority of parties present and voting on a one-member, one-vote basis.
In practice, IMO amendments tend to be adopted by consensus, so if an amendment is present, then the Chair asks for comments and if there are none, the chair declares that “it is so decided,” and the amendment is adopted.
The International Chamber of Shipping comments that: “if the MARPOL amendments are approved by IMO in April 2025, they should enter into force globally in early 2027, with the collection of annual GHG contributions from ships commencing in 2028”.
