How Shipping Is on the Cusp of a Global Carbon Charge

Shipping’s global regulator will decide in October whether to ratify sweeping new rules that would force the oil-guzzling industry to start paying for its greenhouse gas emissions.

A draft of the regulations received widespread support in the spring at talks held by the United Nations shipping watchdog, the International Maritime Organization. But final adoption is far from guaranteed amid US opposition.

The Trump administration has criticized the proposed emission fees, labeling them a “global carbon tax on Americans levied by an unaccountable UN organization.” It’s threatened tariffs and other penalties should the new mechanism be adopted.

If the IMO’s plan is implemented, it would introduce the first ever global price on vessels’ emissions and an economic incentive to switch to cleaner fuels. The new requirements would technically come into effect in 2027 and be mandatory, although ships wouldn’t need to start making payments for their emissions until 2029.

How big is shipping’s emissions problem?

International shipping was responsible for 1.4% of global greenhouse gas emissions in 2024. Vessels collectively spew more than a billion metric tons of CO2 equivalent per year, according to data from Clarkson Research Services Ltd.

The IMO is aiming for shipping — which carries more than 80% of world trade — to get to net-zero emissions “by or around” mid-century. Reaching that objective would require a major transformation, as the industry still overwhelmingly runs on fossil fuels, mostly derived from oil and to a lesser extent liquefied natural gas.

Read the full article on Bloomberg.