ICS proposes GHG fee to meet IMO 2050 target
Revised Proposal for Maritime Emissions Pricing Gains Momentum
A collaborative effort between the International Chamber of Shipping (ICS), the governments of the Bahamas, and Liberia has led to a revised proposal submitted to the International Maritime Organization (IMO). The proposal introduces a greenhouse gas (GHG) pricing mechanism aimed at achieving net-zero GHG emissions from international shipping by 2050. Central to this initiative is a fee per tonne of CO2 equivalent emitted by ships, coupled with a “feebate” mechanism designed to accelerate the adoption of zero or near-zero GHG marine fuels, such as green ammonia, hydrogen, methanol, and sustainable biofuels.
The primary objective of the proposed GHG pricing mechanism is to address the cost disparity between conventional marine fuels and more sustainable alternatives. The mechanism would generate approximately US$2.5 billion annually, which would be allocated to a dedicated Net Zero Shipping Fund. This fund would support GHG reduction efforts in the maritime sector and aid the energy transition in developing countries. The ICS has refrained from specifying the exact GHG fee, indicating that it would depend on the reward rate agreed upon for GHG emissions prevented by using greener energy sources.
In parallel, the 6PAC+ Alliance, comprising Pacific Island nations, has submitted a separate proposal to the IMO. This proposal advocates for a universal mandatory levy on all GHG emissions and the establishment of a simplified global fuel standard (GFS). The alliance argues that this approach, which aligns with scientific assessments from the IMO‘s GHG impact review, is essential to achieving energy transition within the shipping industry. The group estimates that a carbon price of US$150-300 per tonne could generate up to US$127 billion annually between 2027 and 2030.
The ICS has emphasized the importance of adopting a global GHG pricing mechanism to prevent the emergence of fragmented, unilateral GHG charges that could lead to regulatory chaos and economic inefficiencies. ICS Secretary-General Guy Platten underscored the urgency of implementing this mechanism, warning that without it, the shipping industry’s transition to net-zero emissions by 2050 is unlikely to succeed. The proposal will be a key topic at the upcoming IMO negotiations in London, where governments will work on developing new mid-term GHG reduction regulations for adoption in 2025.
