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Global maritime sector faces first-ever carbon pricing under IMO framework. (Photo: Pixabay)
The United Nations’ International Maritime Organization (IMO) on April 11 reached a historic deal on the world’s first carbon pricing mechanism for the shipping industry. Under the new system, vessels exceeding emissions thresholds will be required to pay fees of up to $380 per ton of CO₂, though some member states argue this measure falls short compared to a comprehensive carbon tax.
According to carbon market analyst Sherry Hu from RECCESSARY, global carbon pricing is becoming a widespread trend, and businesses should take early action in two key areas to stay ahead.
Emission fees and allowance trading introduced for high-emitting ships
For the first time, IMO member states—which represent the majority of the global fleet—have taken a vote to initiate decarbonization measures in the shipping sector. Large vessels over 5,000 gross tonnage that emit beyond set limits will pay a fee, starting at $100 per excess ton and rising to a maximum of $380. The goal is to incentivize sustainable transitions within the industry and align it with net-zero ambitions.
In its official statement, the IMO noted that large ships will need to progressively reduce their annual Greenhouse Gas Fuel Intensity (GFI)—a measure of emissions per energy unit. Ships exceeding the cap may purchase unused allowances from lower-emitting vessels or contribute to the IMO Net-Zero Fund, which will support low-carbon fuel development and assist small island nations facing climate risks.
IMO estimates the scheme could generate $10 to $13 billion in annual revenue.
Sherry Hu, carbon market analyst at RECCESSARY, said that if the IMO imposes GHG emissions pricing ranging from US$100 to US$380 per ton in the future, it will reshape the commercial decisions of global shipping companies—including route planning, fuel switching, and vessel upgrades. (Chart: RECCESSARY/Sherry Hu)
For climate-vulnerable island nations, the decision is underwhelming. They have advocated for a stricter carbon tax rather than emissions trading, which they argue would better drive reductions and increase equity. Proponents of a carbon tax estimate it could raise up to $60 billion annually, helping to fund climate justice initiatives.
Consulting firm UMAS forecasts that the current agreement will deliver only modest emissions reductions—an estimated 8% by 2030, well below the IMO’s stated goal of 20%.
Carbon tax dropped amid division; U.S. position remains unclear
Unlike the usual consensus-driven approach of UN bodies, the IMO adopted the measure through a majority vote. Sixty-three countries, including the EU, UK, China, and India, voted in favor.
Oil-producing nations such as Saudi Arabia, Russia, and the UAE opposed the move. The carbon tax proposal never made it to a full vote, prompting many small island nations to abstain.
The U.S., having opposed a carbon tax, withdrew from negotiations and warned it may take “reciprocal measures” if American ships are charged. As such, its stance on the final agreement remains uncertain.
Read more: Shipping faces crossroads with carbon pricing as global talks begin
The IMO expects to finalize regulatory amendments by October, with implementation details reviewed in early 2026. Carbon charges are set to take effect in 2027, with actual payments starting in 2028.
Sherry Hu, carbon market analyst at RECCESSARY, emphasized that shipping has not been directly bound by the Paris Agreement, and traditional fossil fuels remain relatively inexpensive. If the IMO fails to confirm and implement a carbon pricing mechanism as scheduled in October, it could further delay the industry's low-carbon transition.
She warned that without enforceable global standards, Taiwan’s shipping sector may gain only temporary relief, risking long-term competitiveness.
As for how the GHG emissions pricing could affect Taiwanese companies, Sherry Hu pointed to three main areas:
- Higher shipping costs: Local carriers such as YangMing and Evergreen will need to plan ahead, considering strategies like switching to low-carbon fuels or adjusting routes. Without such measures, fleets with higher emissions may lose competitiveness and risk being edged out by cleaner, more cost-effective rivals.
- Rising export costs: Freight charges on high-emission routes will likely be passed on to customers. As Taiwan is an export-driven economy with a strong manufacturing base, the impact will be especially significant for exporters.
- Increased supply chain pressure: International brands and clients will more closely scrutinize the carbon footprints of their supply chains. To secure orders, small and medium-sized manufacturers in Taiwan will need to improve carbon data disclosure and transparency.
As carbon pricing gains momentum globally, Hu recommends that companies take the following two steps:
- For shipping companies: Assess emissions intensity and begin shifting toward low-carbon fuels such as green methanol, green ammonia, or e-fuels. Given the high costs of these fuels, strategic planning for fuel sourcing and route optimization is critical.
- For export manufacturers: Factor carbon pricing into long-term cost structures and enhance carbon footprint management across product lines to avoid financial strain from rising shipping costs.
Read more: Shipping carbon surcharge: Fair pricing or profiteering?
Source: IMO, BBC, The Guardian, Argus Media
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