India has joined 62 other countries in endorsing the world’s first global carbon pricing regime for commercial shipping.
The decision, finalised at a United Nations maritime meet in London, signals a historic consensus to place a monetary cost on the greenhouse gas emissions of one of the world’s most polluting but least regulated industries. The agreement, reached under the aegis of the International Maritime Organization (IMO), introduces a legally binding framework that will compel large ocean-going vessels—those exceeding 5,000 gross tonnage—to either transition to cleaner fuels or pay a carbon tax beginning in 2028. The levy will apply progressively, ranging from $100 to $380 per tonne of emissions, depending on compliance thresholds.
The shipping industry is responsible for nearly 3% of global emissions but remains outside the scope of the Paris Agreement. The carbon tax, which took nearly a decade of negotiation, is expected to raise up to $40 billion by 2030, with all funds earmarked to support green maritime technologies and clean fuel transitions. Officials involved in the negotiations highlighted that the decision was crucial to aligning global shipping with broader net-zero commitments. They stressed that it offers not only a financial deterrent for polluting practices but also a catalytic mechanism to mainstream cleaner maritime operations.
“This carbon pricing framework lays the foundation for a more responsible and technologically advanced shipping sector,” said an official with knowledge of the matter. “It signals that the international community is ready to back regulatory innovations to meet climate targets.” Under the proposed mechanism, real-time emissions from ships will be tracked and monetised, making the industry more accountable and nudging operators to adopt cleaner fuels like green ammonia, methanol, or even electrified propulsion where feasible. Countries such as China, Japan, the European Union, Singapore, and South Africa joined India in voting in favour. Notably, the United States abstained, adhering to its position of not engaging in ongoing negotiations.
However, 16 nations, including major oil-producing states such as Saudi Arabia, the United Arab Emirates, and Russia, opposed the resolution. Critics argue that the tax could raise global freight costs and create trade imbalances unless complemented by equitable transition support for developing economies and small island nations. Experts have acknowledged that while this agreement is a starting point, it still falls short of the IMO’s own 2030 decarbonisation targets. Based on current estimates, the tax could result in only a 10% reduction in absolute emissions from the sector by the end of this decade—half of the 20% minimum reduction the IMO had laid out in its revised strategy adopted in 2023.
Despite the compromise, sustainability advocates view the agreement as a breakthrough in market-driven climate policy. “This could be the tipping point that brings the shipping sector in line with other major emitters,” said an environmental analyst tracking international negotiations. As part of the implementation plan, detailed compliance protocols, baseline targets, and carbon trading mechanisms will be finalised ahead of the formal adoption process scheduled for October. The regulatory blueprint will be complemented by investment in emissions monitoring technology, cleaner port infrastructure, and subsidies for clean fuel development.
India’s support reflects its growing alignment with international efforts to balance economic growth with environmental sustainability. With shipping a critical component of India’s foreign trade and port infrastructure expansion plans, its stake in decarbonising the sector is both economic and ecological. The agreement also resonates with the broader goals of sustainable and equitable urbanisation. Cleaner shipping reduces not just global carbon footprints but also local air and marine pollution near coastal cities, thus contributing to healthier, more resilient urban ecosystems.
While significant challenges lie ahead, including enforcement, cost pass-through, and global equity concerns, the IMO-led carbon pricing move sends a clear message: the age of unchecked maritime emissions is coming to a close. The world’s shipping lanes—long considered the final frontier of decarbonisation—are now charting a course towards climate responsibility.
India joins 62 nations for historic global carbon levy on shipping
