LondonShipping’s first carbon price survived another negotiation round.
The International Maritime Organization’s framework charges ships $380 per tonne of CO2 over the easiest threshold, with revenue earmarked for developing states.
November’s vote requires two-thirds to adopt; the US and Saudi Arabia still oppose.
Sources: Dialogue Earth
WHY SHIPPING IS HARD TO DECARBONIZE
Ships burn the dirtiest legal fuel on the planet — heavy fuel oil, the tar-like residue left after refining. It's cheap, energy-dense, and uniquely suited to massive two-stroke marine engines. No drop-in clean substitute exists at scale.
THE JURISDICTION GAP
A ship registered in Panama, owned by a Greek family, crewed by Filipinos, carrying Chinese goods to Rotterdam burns fuel in international waters. No single country can tax those emissions. This is why the IMO — a UN agency — is the only body that can price shipping carbon globally.
WHAT $380 A TONNE MEANS
That's roughly triple the EU's carbon price and far above any prior shipping levy proposal. Applied to the ~1 billion tonnes of CO2 the sector emits annually, even partial coverage generates tens of billions a year — enough to actually fund alternative-fuel infrastructure rather than just signal intent.
THE FUEL ALTERNATIVES
Green ammonia and methanol are the two leading candidates. Ammonia carries no carbon at all but is toxic and requires new engines. Methanol burns in modified existing engines but its climate benefit depends entirely on whether the feedstock is green hydrogen or natural gas.
WHY THE US AND SAUDI ARABIA RESIST
The opposition splits along predictable lines. Oil exporters lose a large captive market for bunker fuel — the Persian Gulf alone supplies a meaningful share of global ship fuel. The US under the current administration treats any UN-administered carbon revenue mechanism as a sovereignty concession.
THE PRECEDENT
The IMO has set global rules before — the 2020 sulfur cap forced ships to switch from 3.5% sulfur fuel to 0.5%, the largest fuel-quality shift in maritime history. Compliance was nearly universal within months. The carbon framework borrows that enforcement architecture: port-state inspection, with non-compliant ships denied entry.