IMO unlikely to bring in levy this week
Proposed IMO flat-rate levy is unlikely to meet approval from the US, Saudi Arabia, and others (Source: Clean Shipping Coalition)
International Maritime Organization (IMO) member states gather in London this week to define a fuel standard and potential shipping levy on ship carbon emissions, though adoption of the latter is in serious jeopardy.
The decision will be pivotal for the future of the ship repair and retrofit market, with a great deal of potential retrofit work hinging on whether robust decarbonisation measures are adopted at the 83rd session of the Marine Environment Protection Committee (MEPC 83).
A proposed compromise from last week's greenhouse gas (GHG) working group meeting excludes a universal levy and instead includes tiered GHG fuel intensity requirements.
Albon Ishoda, the Marshall Islands' special envoy for maritime decarbonisation, expressed concerns about the proposed package, saying, "I have real concerns that the package being shaped may not be one that truly protects the most vulnerable or ensures no one is left behind."
The IMO had previously committed to adopting an economic measure to meet emission reduction targets of 30% by 2030, 80% by 2040, and reaching zero by around 2050. A study commissioned by the IMO from UNCTAD found that a levy of USD 150 to USD 300 per tonne of greenhouse gas, if properly designed, could minimise the economic impacts of shipping decarbonisation on global GDP.
