India joined 62 other nations in voting in favour of the world’s first-ever global carbon tax on the shipping industry, a landmark decision adopted by the United Nations’ shipping agency in London on Friday, PTI reported.
The measure, passed after a week of intense negotiations at the International Maritime Organisation (IMO), aims to cut greenhouse gas emissions from ships and accelerate the transition to cleaner maritime technologies. The tax is set to take effect from 2028 and marks the first time a global carbon pricing mechanism has been imposed on an entire industry.
Under the new framework, ships will either have to switch to low-emission fuels or pay a fee based on the level of pollution they produce. According to estimates, the tax could generate up to USD 40 billion by 2030.
While hailed as a significant step forward for global climate policy, the agreement has also drawn criticism for failing to address the climate finance needs of developing and vulnerable nations. All funds raised will be used exclusively for decarbonising the shipping sector and will not be allocated to broader climate adaptation or loss and damage efforts.
The pricing mechanism is expected to reduce shipping emissions by just 10% by 2030 — well below the IMO’s own target of at least 20%, PTI noted.
India, along with China, Brazil and 60 other nations, voted in favour of the deal. However, several oil-rich nations, including Saudi Arabia, the UAE, Russia, and Venezuela, opposed the move. Notably, the United States delegation did not take part in the negotiations and was absent during the final vote.
A coalition of over 60 countries — primarily from the Pacific, Caribbean, Africa, and Central America — had advocated for part of the revenue to be directed toward broader climate finance needs. These countries, many of them highly vulnerable to rising sea levels and extreme weather, voiced disappointment with the outcome.
Tuvalu, speaking on behalf of the Pacific Island nations, criticised the lack of transparency in the talks and said the framework does not sufficiently incentivise a shift to clean fuels.
Vanuatu’s Minister for Climate Change, Ralph Regenvanu, accused fossil fuel-producing countries like Saudi Arabia and the US of obstructing stronger measures that could have aligned shipping with the 1.5°C temperature limit outlined in the Paris Agreement.
Under the adopted system, ships will be taxed according to the intensity of their emissions. In 2028, vessels using traditional fuels will pay USD 380 per tonne for the most polluting emissions and USD 100 per tonne for emissions exceeding set thresholds. The tax will be introduced in stages, progressively discouraging the use of fossil fuels, including liquefied natural gas.
Though the overarching framework has been agreed upon, technical details — including the final structure for revenue use and distribution — are yet to be finalised. The policy is expected to be formally adopted in October 2025, PTI said.
Environmental groups and representatives from smaller nations have pledged to continue advocating for a more equitable and ambitious framework.
Laurence Tubiana, CEO of the European Climate Foundation and a key architect of the Paris Agreement, welcomed the IMO’s move as a step in the right direction. “Polluters must pay for the damage they cause to the climate,” she said, but also called the agreement inadequate, noting the absence of a dedicated shipping levy. “This was a missed opportunity,” she added, pointing to growing global support for taxing high-polluting sectors and the ultra-wealthy.
