Highlights

• IMO carbon tax is in the offing to reduce shipping emissions globally.
• US opposition threatens tariffs as shipping moves toward cleaner fuels like ammonia.

The shipping industry is preparing for new carbon tax regulations that could affect global trade.

The International Maritime Organization (IMO), the United Nations’ shipping regulator, is rolling up its sleeves to approve rules requiring ships to pay for the more than 1 billion tonnes of greenhouse gases they release each year.

The plan, years in the making, targets emissions reduction and shifts the industry toward cleaner fuels like ammonia, replacing oil over time. The measures could initially generate over $10 billion annually, which may affect shipping costs and supply chains worldwide.

Read More: MPA and CMA CGM Sign Agreement to Expand Sustainable Shipping

The United States has seen red over the IMO plan and called it a “global carbon tax” on Americans. Washington has suggested tariffs, port levies, and sanctions against countries supporting the rules.

Despite these warnings, nations including the UK and the Netherlands support the framework.

Industry experts, including the International Chamber of Shipping and Boston Consulting Group, predict the regulations will pass, with a two-thirds vote enough to implement the plan if full consensus is not reached.

The rules set targets for ships above 5,000 gross tonnes, which require them to reduce emissions intensity. Vessels missing the base target could face charges of $100 per tonne, whereas failing the stricter target would cost $380 per tonne, plus the $100 penalty.

Also Read: Trump Administration Slams IMO Net-Zero Shipping Framework

Collected funds will support ships using low-emission fuels. The regulations are planned to come into effect in 2027, with payments starting in 2029.

Overall, this move represents a rare advancement in international climate regulation, which pushes the global shipping sector toward net zero emissions by mid-century.

Ends/

Are you looking for sustainability experts to guide your business? Explore our ESG Marketplace, featuring over 1000 providers offering a wide choice of sustainable advisory services.

Follow our Social and Governance News for regular news and views.

Also, check out our latest ESG Event updates

Source: Bloomberg