India Supports Global Carbon Tax for Shipping Industry to Combat Emissions

India was among 63 countries that voted in favor of a global carbon tax imposed on the shipping industry by the United Nations’ shipping agency, the International Maritime Organisation (IMO). The decision was made at the IMO headquarters in London after a week of intense negotiations. This landmark move aims to reduce greenhouse gas emissions from ships and promote cleaner technologies. Starting in 2028, ships will need to shift to lower-emission fuels or pay a fee for the pollution they generate, with the tax expected to generate up to $40 billion by 2030.

While the agreement is considered a breakthrough for international climate policy, it has faced criticism for not addressing the climate finance needs of developing countries. All revenues raised from the carbon tax will be used to decarbonize the maritime sector, rather than being allocated to broader climate finance efforts. The carbon pricing initiative is projected to reduce shipping emissions by only 10% by 2030, falling short of the IMO’s target of at least 20%.

The deal was supported by countries like China and Brazil but opposed by oil-rich nations such as Saudi Arabia, the UAE, Russia, and Venezuela. The US delegation was notably absent from the negotiations and voting. Countries vulnerable to climate change, like those in the Pacific Islands, expressed disappointment with the outcome and criticized the lack of transparency in the negotiations. Vanuatu’s Minister for Climate Change highlighted that certain countries had hindered progress towards aligning the shipping sector with the 1.5 degrees Celsius temperature limit set by the Paris Agreement. Ships will be charged based on the intensity of their emissions under the new mechanism.

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