India and 62 Nations Endorse World's First Global Carbon Tax for Shipping Sector.
International
In April 2025, India along with 62 other countries agreed to the world's first-ever global carbon tax by including commercial shipping under its ambit to combat Greenhouse Gas (GHG) emissions in the sector.
- This historic move was finalized following a vote at the United Nations (UN)-backed International Maritime Organisation (IMO) headquarters in London, United Kingdom (UK).
- A total of 63 nations, including India, Brazil, China, the European Union (EU), Japan, South Africa, and Singapore, voted in favor of the new carbon pricing mechanism for the shipping industry. However, major oil-producing countries like Saudi Arabia, the United Arab Emirates (UAE), Russia, and Venezuela opposed the proposal.
- Currently, the shipping industry contributes to 3% of global GHG emissions.
Main Point :- (i) The new carbon tax framework is expected to be formally adopted in October 2025, after which it will become mandatory for large ocean-going ships exceeding 5,000 gross tonnage, which currently contribute to 85% of total Carbon Dioxide (CO2) emissions from international shipping. The carbon tax will officially be enforced from 2028, marking a significant regulatory step for the maritime industry.
(ii) Under this framework, ships will be required to either transition to low-emission fuels or pay emission fees ranging from USD 100 to USD 380 per tonne, depending on their pollution levels. This pricing mechanism aims to push shipping companies towards cleaner energy alternatives while placing financial responsibility on higher emitters.
(iii) Since the shipping sector was not included under the 2015 Paris Agreement, this legally binding global carbon tax represents a major milestone in addressing emissions from the maritime domain. The initiative is projected to generate USD 30–40 billion in revenues by 2030, averaging USD 10 billion annually, all of which will be dedicated to decarbonizing the shipping industry. However, the framework is expected to cut CO2 emissions by only 10% by 2030, falling short of the IMO's target of a minimum 20% reduction.
About International Maritime Organisation(IMO)
Secretary General : Arsenio Dominguez
Headquarters: London, the United Kingdom (UK)
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