A coalition of 47 nations has submitted a revised and detailed proposal to implement a global bunker fuel levy under the International Maritime Organization (IMO). If approved at the upcoming Marine Environment Protection Committee (MEPC) meeting in April, this would mark the first UN-administered global carbon tax, with significant implications for both the maritime and energy sectors.
A Bold Step Toward Energy Transition
“The industry fully supports the adoption of a globally applied GHG pricing mechanism by the IMO. This joint proposal is a pragmatic solution and the most effective way to incentivize a rapid energy transition in shipping,” a spokesperson for N.V. Cargo Logistics stated. The text represents months of intense negotiations and collaboration.
At the October MEPC 82 meeting, the IMO deliberated on mid-term measures to reduce shipping emissions but did not finalize any agreements. Among the most debated—and arguably the most necessary—proposals were a global tax on bunker fuels and subsidies for green fuels to bridge the cost gap between traditional and low-carbon alternatives.
Key Proposal Details
Under the plan, vessels would begin paying a levy on their annual bunker fuel consumption starting in 2028. A penalty for non-compliance is under consideration, though specifics have yet to be finalized. The funds would be managed by an IMO-administered body overseen by the MEPC and governed by an internationally diverse board.
Additionally, vessels using green fuels would be eligible for financial rewards based on their consumption data. These incentives would be funded by the revenue collected from fossil-fueled ships, effectively subsidizing the adoption of green fuels. The fund would also support research into sustainable fuels and assist developing nations in transitioning to eco-friendly maritime solutions.
Dynamic Tax Structure
The initial levy amount will be decided in future discussions, with estimates ranging between $60 and $300 per ton of bunker fuel. Unlike traditional carbon tax frameworks, this levy would not follow a fixed escalation timeline. Instead, adjustments would require periodic reviews and votes by MEPC member states every two to five years.
Support and Opposition
The list of supporters includes key maritime nations such as Japan and Greece, alongside the largest flag registries. However, some governments remain hesitant. “While many governments now back a universal flat-rate GHG contribution by ships—or something similar—a minority continue to express concerns,” noted the N.V. Cargo Logistics spokesperson. “We will work closely with all IMO member states to address these concerns during the final stages of these critical negotiations.