LONDON — The global effort to put a price on maritime emissions has run aground once again. The International Maritime Organization (IMO) voted to delay by one year a decision on a carbon pricing mechanism for shipping, following sustained pressure from the United States and Saudi Arabia and support from Singapore to postpone amid divisions over cost and equity.
The setback touches one of the most consequential climate proposals under UN negotiation — a plan to impose a global price on ship emissions, a sector responsible for about 3% of global greenhouse gases. Backers — including the EU, Pacific Island states and several African nations — argue a global mechanism could raise billions annually to fund decarbonization and climate adaptation for vulnerable countries.
Fractured negotiations
Talks in London were billed as a chance to close years of technical debate. But U.S. and Saudi delegates pressed to postpone a vote, citing unresolved design questions on revenue use and impacts on trade costs. Singapore supported a delay while broader divisions persisted over equity and burden-sharing. The U.S. has previously warned it could take reciprocal measures against any fees applied to its ships.
Supporters of a swift decision warned that further delay erodes the IMO’s credibility and raises transition costs over time. Pacific negotiators, who have long pushed for robust pricing, said they would keep pressing for a stronger, more equitable deal in the next round.
The stakes
Earlier Pacific proposals floated a $100/ton CO₂ levy, with World Bank-cited estimates suggesting such a charge could raise $40–60 billion per year, much of it directed to climate-vulnerable states. By contrast, the compromise framework discussed this year would have generated roughly $11–12 billion annually in its initial phase.
Without a universal price, governments are likely to move unilaterally. The EU Emissions Trading System now covers maritime routes into European ports, and other jurisdictions are weighing similar measures — a patchwork that could fragment compliance and financing signals across global shipping.
Pressure on industry
Shipowners say they need clarity to finance new fuels and vessels. Companies are piloting methanol and ammonia, but board-level investment decisions hinge on predictable policy. Environmental groups, meanwhile, called the delay a political failure that prolongs uncertainty and slows capital shifts toward cleaner fleets.
What comes next
The IMO will revisit the issue in one year, pushing a final decision beyond COP30 in Brazil and increasing the odds that regional measures — and private alliances — shape the market in the interim. For diplomats and finance ministers, the takeaway is blunt: one of the few remaining global routes to price carbon is again on hold, squeezed between economic anxieties and the limits of consensus diplomacy.
Related Content: Charting a New Course: IMO Carbon Tax Sets Sail
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