Context:
India and 62 other countries voted in favour of imposing the world’s first-ever global carbon tax on the shipping industry.
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- The decision was taken at the London headquarters of the International Maritime Organisation (IMO).
- It approved a global fuel standard and greenhouse gas pricing mechanism, so as to reduce climate impacts from shipping and promote cleaner technologies.
- The negotiations were led by the IMO’s Marine Environment Protection Committee (MEPC).
- The shipping industry accounts for 3% of global emissions and is not covered under Paris Agreement, making the levy a significant development.
- This will be the first global tax on greenhouse gas emissions.
- While technical details still being worked out, the policy is expected to be formally adopted in October 2025.
- It will become mandatory for large ocean-going ships of over 5,000 gross tonnage, which emits 85% of the total carbon dioxide emissions from international shipping.
- Under the agreed framework, if a ship continues to use conventional fuel in 2028 it would have to pay $100 to $380 per tonne of emission, depending on crossing the threshold of ‘base’ and ‘direct compliance’ targets