More than 20 countries, including France, Spain, Norway, and Portugal, have expressed their support for a carbon tax on the global shipping industry's greenhouse gas emissions at a global finance summit held in Paris this week. This move is a significant step towards making the international shipping industry accountable for its contribution to climate change.
The European Commission has also given its backing to the idea of a levy on greenhouse gas (GHG) emissions by the international shipping sector. Even commodity trading giant Trafigura Group and the International Chamber of Shipping, which represents more than 80% of the merchant fleet, have supported the idea of a carbon tax.
While charging shippers for their emissions is not a new idea, discussion of a maritime tax remains ongoing within the International Maritime Organisation (IMO). However, this joint statement from over 20 countries demanding the levy shows that the idea of a carbon tax has gained significant momentum.
The shipping industry is responsible for around 3% of man-made CO2 emissions and transports more than 80% of the world trade. As a result, making the industry pay for its pollution would help bridge the gap between the relatively cheap fossil fuels the industry uses today and cleaner energy alternatives like methanol and ammonia.
However, getting an agreement at the IMO, which has over 170 member states with competing interests, is not an easy task. The IMO's Marine Environment Protection Committee is expected to revise the strategy for cutting GHG emissions in early July. Still, no final decision on a global carbon levy is expected at this meeting.
It is worth noting that the world's two largest economies, the US and China, are not currently on board with the idea of a carbon tax. That said, US Treasury Secretary Janet Yellen has recently stated that she would consider the proposal for a maritime tax. It remains to be seen whether other nations that have not yet thrown their support behind the tax will choose to do so, but the momentum seems to be building.