🔍 What’s going on?
Sixty-three of the world’s largest shipping countries have agreed, through the International Maritime Organisation (IMO) to impose a $100 fee on every ton of greenhouse gas emissions emitted by large ships.
🚢 What does this mean?
The IMO, which regulates international shipping has effectively put the first global price on greenhouse gas emissions. This tax will take effect in October 2025 and will become mandatory for large ocean ships with over 5,000 gross tonnage from 2027. These ships emit 85% of the total GHG emissions from international shipping.
The IMO estimates the fees will generate between $11 billion to $13 billion in revenue annually for the IMO’s net zero fund. The money will be used to invest in fuels and technologies needed to transition towards net-zero shipping, reward low-emission ships and support innovation, and infrastructure in developing countries so they aren’t left behind with dirty fuels and old ships.
❓Why should I care?
Between 80% to 90% of world trade is transported by ships, which includes a wide range of goods, from raw materials to manufactured products. This also means that shipping accounts for around 3% of global emissions - roughly equivalent to 1 billion tonnes of greenhouse gases every year. This carbon price on shipping helps reduce greenhouse gas emissions by creating a financial incentive for the shipping industry to adopt cleaner, more sustainable practices.
This carbon tax on shipping will primarily impact businesses involved in international trade and logistics, as it will affect the cost of transporting goods by sea. For those businesses operating within the shipping industry (e.g. freight carriers, port operators), this will likely lead to increased operational costs as they will directly bear the cost of the carbon tax. On the other hand, companies that rely heavily on shipping to import and export goods will also see an increase in freight costs such as those that depend on bulk shipping - i.e. manufacturers, raw material industries, and retailers.
🚦Where do we need to be?
The shipping industry has already set a global net zero goal by or around 2050 with the IMO and this newly announced global carbon price is forward movement towards net zero. However, the IMO also estimates that by 2050, the shipping industry will grow between 40% and 115%. In this case, emissions from shipping could also grow between 50% to 250% by 2050.
The transition to net zero will require a massive increase in funding for low-carbon fuels, energy and infrastructure. Experts say that it will cost around $1 trillion - $1.4 trillion to achieve the industry’s decarbonisation goals.
👤What can I do about it?
The majority of companies rely on sea transportation, so this new carbon fee can be used as an opportunity to review your freight strategies and implement the following actions:
- Audit your current freight carriers’ emission profiles and prioritise partners that deploy low‑carbon fuels (e.g. biofuels, hydrogen, ammonia, green methanol).
- Build emissions criteria into your RFPs and supplier scorecards—make carbon performance a core KPI.
- Negotiate contracts that include carbon‑performance incentives, rewarding carriers that reduce GHG intensity.
- Explore long‑term partnerships on green‑shipping corridors or charter agreements for vessels powered by next‑generation fuels.
- While you transition, invest any residual emissions fees in accredited marine carbon‑offset projects.
- Publicly report your scope 3 shipping emissions and mitigation actions to strengthen your ESG credentials.
Related: Oceans could recover by 2050