Asia, home to more than half of the world’s top 10 major shipowners, is split in its support for a global levy on shipping emissions, as the International Maritime Organisation (IMO) concluded its interim discussions on 21 February in London.
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Japan and South Korea have joined 45 other governments like the United Kingdom and the world’s biggest flag states in backing the Pacific islands’ proposal for a levy on maritime emissions.
China, Indonesia and COP30 host Brazil opposed the plan, arguing that it would be costly, reduce exports from developing countries and affect food security.
Discussions at the IMO, which is the United Nations body that regulates the safety and environmental performance of international shipping, ended on Friday without an agreement on whether to impose a levy on all of a ship’s emissions. However, proponents won over more than a dozen countries to support the tax during the week-long conference, including shipping-reliant New Zealand and Dominica. The IMO makes decisions by consensus, but can also do so by majority support.
Last week’s talks were intended to get clarity on greenhouse gas reduction policies, set for approval in April.
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Japan and South Korea are not only securing their long-term competitiveness in the global maritime sector but also shaping a sustainable and resilient future for the industry.
Yumin Han, shipping researcher, Solutions for our Climate
The United Nations agency has been working towards a net zero greenhouse gas emissions target for the industry by mid-century as part of global efforts to combat climate change. Following the target creates a “strategic economic opportunity” for leading shipbuilders like Japan and South Korea, said Yumin Han, shipping researcher for South Korea-based nonprofit Solutions for our Climate.
Both countries have long been preparing for the sector’s clean energy transition, said Han. HMM, the largest shipping company in South Korea has a blueprint to attain carbon neutrality by 2050. Japan-based Mitsui OSK Lines (MOL) and one of the largest shipping companies in the world, has set a target of achieving net zero emissions by 2050.
“As leading shipbuilding powerhouses, the shift to cleaner fuels will drive demand for a new generation of low and zero-emission vessels, boosting shipbuilding and related industries. By leading the shift toward alternative fuels, Japan and South Korea are not only securing their long-term competitiveness in the global maritime sector but also shaping a sustainable and resilient future for the industry,” Han told Eco-Business.
Member states at the intersessional working group at the International Maritime Organisation (IMO) headquarters in London on 17 February 2025. Image: IMO
Export-oriented countries like China and Indonesia are opposing the measure because it is a common belief that a levy imposed on all international ships will increase shipping costs, thereby incentivising near-shoring, an insider at the closed-door meetings told Eco-Business.
Large shipping companies in China have also pledged to reach net zero by 2060, rather than mid-century to align with the country’s national net zero goal of 2060.
“Shipping is considered a hard-to-abate sector, and there is a common belief that the sector should be given a longer timeline to transition to net-zero. As a result, shipowners have delayed addressing the greenhouse gas footprint of their fleet,” said the spokesperson, a founder of a Hong Kong-based transport consultancy who preferred to stay anonymous.
A carbon tax of US$100 per tonne of greenhouse gases could generate up to US$60 billion a year in revenues that could be reinvested in a fund for developing low-carbon shipping fuels and supporting poorer countries to transition to cleaner shipping, say proponents.
It would make traditional oil-based bunker fuel more expensive and incentivise the use of lower-emitting fuels like ammonia, biofuels, methanol and hydrogen.
In parallel to a carbon tax, discussions also covered the introduction of a global fuel standard that sets a greenhouse gas intensity requirement for marine fuels. Shipping companies would be forced to switch to lower carbon fuels on at least some of their vessels, or use those that blend in alternative fuels with lower pollutive intensity.
Singapore and India, which provide the world’s biggest ports, and the Philippines, one of the top providers of seafarers and maritime officers, have yet to take a firm stance on the issue.
A source told Eco-Business that such countries are at the “back end of the zero-emission transition decision”.
“They respond to the decisions made by shipowners, rather than being the leaders. So I believe Singapore and India, which do not have large shipowners, as well as Philippines, will wait and see the position of other key member states and stakeholders to reveal their positions,” the source said.
Could IMO’s green plan fuel deforestation?
Ahead of the talks, a number of nonprofits lead by T&E and some major shipping giants like Germany-based Hapag-Lloyd called on the IMO to exclude deforestation-driving biofuels like palm and soy from its list of green alternatives to traditional fossil fuels.
Under the current draft of the UN agency’s green fuels law, nearly a third of global shipping could run on biofuels in 2030 from less than 1 per cent today, based on analysis by T&E.
“Palm and soy oil would likely make up nearly two-thirds of the biodiesel used to power the shipping industry in 2030 as they represent the cheapest fuels to comply,” T&E said in a statement.
“This poses a serious climate problem as palm and soy are responsible for two to three times more carbon emissions than even the dirtiest shipping fuels today, once deforestation and land clearance are taken into account.”
Advocates echoed the call, noting the environmental risks associated with biofuels, particularly those derived from food crops and oil crops.
Han said: “While biofuels are sometimes considered a bridge fuel, the IMO must ensure sustainability standards that prevent fuels from causing more harm than good. Rather than relying on high-risk biofuels, the industry should prioritise truly sustainable solutions such as green hydrogen, ammonia, and synthetic e-fuels that align with net-zero goals without compromising ecosystems or food supplies.”
