47 COUNTRIES AND INDUSTRY PROPOSE GHG LEVY FOR GLOBAL MARITIME EMISSIONS
At the end of December, 47 countries – including all EU Member States – and the International Chamber of Shipping (ICS) issued a joint contribution advocating for the introduction of an annual GHG levy per ship as part of the IMO maritime decarbonisation strategy.
The joint submission sets out convergent regulatory text for amendments to the IMO MARPOL Convention – currently under negotiations as part of the implementation of the IMO Strategy on reduction of GHG from ships – which would require shipping companies operating ships on international voyages to make GHG contributions per tonne of CO2e emitted to a new “IMO GHG Strategy Implementation Fund”. The key purpose of this mandatory GHG charge would be to reduce the cost gap between zero/near-zero GHG emission fuels (such as green methanol, ammonia and hydrogen) and conventional marine fuels, to incentivise the accelerated uptake of green energy sources. Revenue generated would be used to reward the production and uptake of such fuels, whilst also providing support to the maritime GHG reduction efforts of developing countries.
The exact price of a tonne of CO2e emitted has not yet been agreed by IMO Member States, but is expected to fall within a range equivalent to between USD 60 and up to USD 300 per tonne of conventional marine fuel oil consumed, depending on the agreed reward rate for the use of zero/near-zero GHG marine fuels and the level of revenue to be allocated annually to support developing countries.
This mature regulatory proposal will be considered by an IMO working group meeting in February. If the MARPOL amendments are approved by the 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.