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With talks underway in London to discuss the future of the shipping industry, there is fierce debate over the introduction of a global carbon levy.
In one camp, there are those that support a carbon tax as a key part of the polluter pays principle. In the other camp are those that only want a penalty system built within a global fuel standard (GFS), which is a measure that will push ships to decrease fuel greenhouse gas emissions. Some argue that you don’t need a carbon tax if you can have penalties for non-compliance under the GFS.
But this doesn’t work. T&E’s analysis shows that even under an ambitious global fuel standard, the vast majority of shipping emissions would escape any costs in the coming decades.
Globally, this would deny millions in financing for a just and equitable transition, as well as for the development of green hydrogen e-fuels which are needed to reach the goals of the 2023 IMO GHG Strategy.
A global greenhouse gas levy, in combination with the global fuel standard, is therefore essential to ensure that shipping companies start to bear the cost of their emissions and contribute to financing the industry’s decarbonisation.
