NEWS –

• The International Maritime Organization (IMO), a UN agency, approved a global carbon pricing system(Carbon Tax) for the shipping industry.
• The decision aims to curb emissions from ships and move toward carbon neutrality by 2050.
• The full implementation is set for 2028.

KEY FEATURES OF THE AGREEMENT

Carbon Pricing Mechanism

• Ships must use less carbon-intensive fuels or face financial penalties.
• Annual fees will apply for every tonne of greenhouse gases emitted beyond set limits.

Use of Generated Revenue

• Funds will be used to:
  • Incentivise zero or near-zero emission technologies.
  • Support developing countries in upgrading to low-emission maritime operations.

GLOBAL SUPPORT AND OPPOSITION

Countries in Favour (63 Member States)

• Supporters include:
  • European Union
  • India
  • China
  • Brazil
  • Japan

Countries Opposed (16 Member States)

• Notable opponents:
  • Saudi Arabia
  • Russia
  • United Arab Emirates
  • Mostly major fossil fuel exporters

Neutral and Non-Participants

• Pacific Island nations: Abstained; criticized the plan as not ambitious enough.
• United States: Did not participate in the vote.

CRITICISM AND REACTIONS

Pacific Island Concerns

• Argued the system lacks urgency and ambition.
• Advocated for a universal carbon levy to aid climate resilience in vulnerable areas.

Environmental Groups’ Perspective

• Described as a “groundbreaking moment” for the industry.
• However, warned that key elements are insufficient to ensure effective climate action.
• Risk that the transition may be “blown off course” without stronger measures.

BACKGROUND AND CONTEXT

Climate Impact of Shipping

• Shipping contributes nearly 3% of global greenhouse gas emissions.
• Without action, this percentage is expected to increase significantly.

Negotiation Details

• The agreement followed intense negotiations in London.
• Focus was on selecting the right mechanism to ensure carbon neutrality in the shipping sector by 2050.