Following discussions during the 81st meeting of the Marine Environment Protection Committee (MEPC 81), which took place March 18–22, 2024, member states of the International Maritime
Organization (IMO) agreed on a draft net-zero standard (IMO net-zero framework) for the total reduction of net greenhouse gas (GHG) emissions from international maritime transport by 2050, in line with the strategy adopted by IMO in 2023, during MEPC 80 (IMO 2023 Strategy).
In addition to the net-zero target established for 2050, the IMO 2023 Strategy also established a commitment to ensuring an increase in the supply of clean, low-carbon fuels by 2030, as well as intermediate targets for reducing GHG emissions by at least 20% by 2030 (making progress toward 30%) and at least 70% by 2040 (making progress toward 80%).
However, the main provision of the approved draft of the IMO net-zero framework is the commitment to create the world's first global carbon tax, which will be used to finance the energy transition of international maritime transport and reduce the disparity between prices of traditional fuels and low-carbon fuels.
In a consensus vote, IMO member states set out the decisions
that still need to be made about carbon pricing in shipping,
including how to calculate a price, how to charge it, who would
collect it, and which fuels are considered low-carbon. The IMO
member states are looking at different proposals in which the price
per ton of GHG ranges from $20 to $250.
MEPC will meet again between September 30 and October 4, 2024,
(MEPC 82) to continue negotiations, and IMO estimates that a final
decision on the carbon pricing should be made by next year.
Ocean shipping is responsible for about 3% of all GHG emissions, and 90% of all goods are transported by sea. For countries that have their economy based on commodities, the carbon tax could add the considerable challenge of increased freight costs. The fact that today more than 70 nations already have individual carbon taxes or emissions trading systems in effect adds complexity to the discussion.
The lawyers of the Environmental, Climate Change and ESG, and Maritime practices of Tauil & Chequer Advogados, in association with Mayer Brown, are available for additional information.
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