EU carbon tax puts a price on shipping emissions

(China Dialogue, 3 Feb 2022) The European Union is trying to clean up one of the world’s dirtiest industries by taxing ships’ carbon emissions.

Ships emit around one billion tonnes of greenhouse gases every year, or 3% of global emissions. If it were a country, shipping would be the sixth-largest polluter in the world, according to the World Economic Forum. Without further action, shipping emissions are expected to reach 90-130% of their 2008 levels by 2050.

The International Maritime Organization (IMO), the UN body responsible for shipping, has long been criticised for failing to address the urgency of the climate crisis and dragging its feet on introducing regulations to curb emissions. 

One of the most contentious issues that keeps coming up at IMO meetings is whether the industry should set a carbon tax. Pacific Island nations, which are particularly vulnerable to rising seas, have called for a carbon price of US$100 per tonne on bunker fuels. But emerging economies, including China and South Africa, oppose the measure. 

The EU is taking matters into its own hands. To achieve its 2030 goal of reducing emissions by at least 55%, the bloc is revising its climate, energy and transport legislation under the “Fit for 55” package. The proposed reforms include several shipping measures, ranging from a sustainable fuel mandate within the EU to the inclusion of maritime emissions in the bloc’s emissions trading scheme (ETS). 

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China Dialogue, 3 Feb 2022: EU carbon tax puts a price on shipping emissions