Global Carbon Tax on Shipping Approved Despite U.S. Withdrawal

The IMO agreement requires ships to cut emissions or pay fees, with implementation set for 2028 pending final approval in October.

The International Maritime Organization (IMO) reached a landmark agreement on April 11, requiring ships to reduce emissions or pay a carbon tax starting in 2028.
Revenue from the tax, projected between $11-40 billion annually, will fund the transition to greener shipping fuels and support vulnerable nations.
The agreement garnered support from India, the EU, China, and Brazil, while the U.S. and petroleum-exporting nations opposed the measure.
The compromise targets an 8-10% emissions reduction, significantly lower than the IMO's original 20-30% proposal, drawing criticism from island nations.
The framework aims to incentivize cleaner fuels like biofuels and hydrogen, though concerns persist over potential deforestation and economic impacts on developing countries.