India Backs Shipping Carbon Tax

India’s Support: India, along with 62 other nations, voted in favor of the first global carbon tax on the shipping industry, as decided at the International Maritime Organisation (IMO).

Goal: Aims to cut greenhouse gas emissions from ships and promote cleaner technologies, taking effect in 2028.

Tax Framework: Ships over 5,000 gross tonnage must use cleaner fuels or pay a tax ($100-$380

Revenue Generation: Expected to generate up to $40 billion by 2030 for reinvestment in maritime decarbonization.

Shipping’s Impact: The shipping industry contributes ~3% of global greenhouse gas emissions and wasn’t included in agreements like the Paris Agreement.

India’s Shipping Growth: India aims to be a top 5 shipbuilding nation by 2047 with its fleet growing to 1,530 ships by 2023, and is third in ship recycling. Major ports have increased cargo capacity.

Criticism: The deal has faced criticism for failing to address the climate finance needs of developing countries, revenue is allocated for only maritime sector decarbonization and also carbon pricing is expected to reduce shipping emissions by only 10% by 2030, far short of the IMO’s own target of at least 20%.

Opposition: Oil-rich nations like Saudi Arabia, the UAE, Russia, and Venezuela opposed the tax.