Dubai, 13 October (Argus) — The International Maritime Organization (IMO) plan for a global greenhouse gas (GHG) levy on shipping is facing resistance from several developing nations, which say crucial aspects of the proposal remain unclear.
The IMO is holding an extraordinary session from 14–17 October to vote on formally adopting amendments, passed in April, that introduce a two-tier compliance system. These levy penalties of $/t and $/t of CO2 equivalent (CO2e) on ships exceeding defined emission-intensity thresholds for the 2028–30 period.
Supportive countries say the levy is a crucial step to push shipping towards cleaner operations. Carbon credit trading, where shipowners can trade emission allowances, aims to reward efficiency and accelerate a shift to lower-emission fuels, they say.
But others, notably from a bloc of developing nations, described the amendment as a “global levy with the trappings of flexibility”, arguing it was negotiated without sufficient impact assessment.
Countries including Saudi Arabia, the UAE, Kuwait, Iraq, Qatar, Oman, Bahrain and Iran, alongside Indonesia, Malaysia, Pakistan, Thailand, Russia and Venezuela opposed the draft at MEPC 83 in April. Together they represent about 7.6pc of global merchant-fleet deadweight tonnage and many are major hydrocarbon exporters.
“This affects more than 80pc of global trade but only 3pc of emissions,” said an IMO delegate of the Net-Zero Framework (NZF) proposal. “It will inflate food prices and add to freight costs without guaranteeing meaningful decarbonisation.”
Developing-country delegates said key elements are undefined, including the fund’s governance structure, post-2030 penalty escalation, and lifecycle emission assessment methods.
The baseline emission-intensity reference of 93.3 g CO₂e/MJ (well-to-wake, based on 2008 baseline) is established in IMO documents. Critics say this does not sufficiently account for upstream (well-to-tank) variance or methane mitigation efforts.
“The carbon-price tiers were not modelled in public documents — countries simply negotiated figures based on their assumptions,” a source said.
Delegate sources also raised legal concerns.
“The IMO would be in a position to penalise or reward operators directly,” a delegate said. “That goes beyond what member states have authorised.”
They further argue the framework contravenes the Paris Agreement principle of common but differentiated responsibilities by applying uniform penalties across nations, diverging from the bottom-up approach of nationally determined contributions (NDCs).
Proceeds from the compliance system would flow into a fund, with intended use to reward low-emission operators and support research & development for zero- and near-zero emission fuels. Consultancy UMAS said the NZF could raise $11bn-12bn a year between 2028 and 2030.
Critics proposal say there is no clear method for distribution, and that “the fund risks becoming a black box that accumulates penalties rather than driving decarbonisation.”
Unlike aviation’s Corsia, which allows external offsets and recognises transitional fuels, the IMO framework is more constrained.
“Ships will not be able to offset emissions via credits outside the maritime sector,” a delegate said.
That could disadvantage operators investing in ‘transitional’ fuels such as LNG or low-carbon hydrogen, where infrastructure is uneven.
The shipping industry appears far from united as the IMO session gets underway.
The national shipowner associations of Japan, Norway, Denmark, the UK, Belgium, the Netherlands and Singapore have jointly pushed for NZF adoption, and industry bodies including ICS and WSC have publicly supported the NZF, seeing global rules as necessary to avoid fragmentation.
But support is not unanimous: some shipowners and states, especially smaller or less-resourced ones, have expressed reservations about cost burdens and procedural consultation. The US did not vote in April and has since rejected the NZF, warning it may raise fuel and shipping costs and provoke reciprocal measures. In a statement on 10 October, US officials cautioned that estimates point to potential double-digit cost increases in some cases.
By Bachar Halabi
