Plans for new levy on shipping industry to support net-zero goals

Measures would come into force in 2027 as part of wider green strategy

A container ship on the Panama Canal this month. The shipping industry is looking for ways to hit net-zero goals. Photo: EPA

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Decarbonising the shipping industry is a goal of climate talks at Cop28, with leaders meeting to discuss the urgency of cutting emissions.

The scale of the task is clear because 90 per cent of world trade relies on shipping.

While a fifth of new vessels on order are being built to run on fuels like green hydrogen and green ammonia, analysts said much more must be done to transform an industry heavily dependent on fossil fuels.

A universal mandatory levy, which is science-based, can play a pivotal role in compelling the maritime industry to reduce its carbon footprint

Albon Ishoda,
Marshall Islands presidential special envoy for shipping

A maritime levy is under discussion, and a strategy to cut greenhouse gas emissions from ships laid down from July by the International Maritime Organisation (IMO) was regarded as a starting point for discussions.

Such a plan would seek to reach net zero in shipping by 2050, and a lead to a commitment to ensure uptake of alternative fuels by 2030.

“Our member states have significantly reinforced their commitment to reducing greenhouse gas emissions from the shipping sector,” said Arsenio Dominguez, the IMO's secretary general elect.

“We will ensure that the reduction requirements in the strategy will be met.

“These measures will be adopted in the autumn of 2025 and come into force in 2027, so it will be quite a challenging period.”

The Marshall Islands relies heavily on imported fossil fuels. Photo: AP

The Marshall Islands – halfway between Australia and Hawaii – relies heavily on imported fossil fuels, but is facing the threat of climate change through rising sea levels.

The archipelago nation is also hugely reliant on shipping and is home to the world’s third largest ship registry.

It is now leading the way with its decarbonising ambitions and aims to slash emissions by 40 per cent by 2030.

Wind power

The Marshall Islands is also investing in research into how sailing can be utilised by supply vessels.

Construction of a 48-metre Pacific Island Supply Vessel began in June 2023 in Geoje City, South Korea. It is equipped with a modern sail system and solar panels for power.

A 500-metre square sail area has the potential to take a vessel to 12 knots, with a hybrid transmission system and backup diesel generator guaranteeing speeds of seven knots in rough seas.

Albon Ishoda, presidential special envoy for shipping in the Marshall Islands, said decarbonising methods and a maritime levy would only prove effective if the global industry fully committed to decarbonising.

“We urge the international community to recognise the magnitude of the climate crisis and the need for more ambitious measures within the maritime industry,” he said.

“We must continue to press for deeper cuts in greenhouse gas emissions to safeguard our environment in future generations.

“A universal mandatory levy, which is science-based, can play a pivotal role in compelling the maritime industry to reduce its carbon footprint.

“We also recognise the potential economic opportunities that can arise from green shipping practices, and the development of sustainable shipping technologies.”

In the UAE, one of the world’s busiest shipping centres, carbon emissions have been cut by 50 per cent by port operator DP World in an effort to achieve net zero emissions by 2050.

Ragnhild Sjoner Syrstad, state secretary to the Minister of Climate and Environment of Norway, said the IMO agreement will prove to be a landmark moment in the shipping industry’s transition to net zero.

“Our domestic actions are not only developing technical solutions but also developing urban markets for batteries, green hydrogen and green ammonia,” said Ms Syrstad.

“We have a specific pathway, and our actions supporting developing countries in their transition towards low and zero emission shipping is important to build a sustainable economy.”