02-09-2021 Marshall Islands doubles down on $100 emissions levy plan, By Anastassios Adamopoulos, Lloyd’s List
Shipping needs a $100 levy on emissions that will continually increase to help the most climate change affected nations, the IMO has been told in a new proposal. The Marshall Islands and the Solomon Islands have further developed their original proposal for a $100 per tonne of CO2 equivalent levy on all ships, through a new submission to the IMO’s Marine Environment Protection Committee that meets in November.
The two countries called the initial $100 levy they are proposing “low” and argued that the MEPC should only consider increasing it over time. The $100 levy would rake in around $90bn annually based on 2018 fuel consumption levels. The Marshall Islands and the Solomon Islands want to see it come into effect by the end of 2025 at the latest. The proposal suggests that the levy should be increased in five-year or annual intervals. They suggest the levy should be raised by either 30% or 100% at each interval. “The important aspect is the certainty of a certain minimal increase and a future minimum price for fossil fuels,” they said.
They propose that the MEPC set up a new dedicated entity, called the International Greenhouse Gas Levy Fund, that would be responsible for collecting and managing the money. Ships would have to pay into this fund for every bunker they purchase, within one month of bunkering the fuel. In terms of revenue distribution, the proposal is heavily focused on supporting those states most affected by climate change and shipping emissions.
The Greenhouse Gas Levy Fund would reserve 51% of its annual revenues for “distribution to most vulnerable countries particularly small island developing states and least developed countries for climate change mitigation and adaptation efforts in vulnerable countries”. It will also offer “support for the applied research and development of low-carbon and zero-carbon emission technologies that are specifically tailored for maritime application, including support of deployment of such technologies to ensure equitable global uptake by all member states”.
The incoming money would be directly controlled by the IMO through this fund, but with the option of allocating some of it to other relevant agencies, such as the UN’s Green Climate Fund that is tasked with helping developing nations mitigate and adapt to climate change and who can then distribute that money directly as well. The MEPC would also appoint a board that would oversee this new Greenhouse Gas Levy Fund, which would also have a secretariat. The board would ratify or reject the secretariat’s proposals for the annual allocation of the funds.
“Thus, the proceeds from the levy would be exclusively under the control of an IMO instrument, but much of the burden of distribution could be placed on other, possibly existing, organizations,” the proposal said. The MEPC agreed in its last meeting in June to officially begin considering market-based measures, including the $100 levy proposal, during upcoming meetings this year.
The proposal by the two Pacific nations received positive feedback from certain countries, such as the UK and France while others such as Greece, Japan, and the United States, expressed their support but also raised concerns with specific elements of the proposal. Other nations, including China, Russia, South Africa, Argentina, Malaysia, and others opposed the call.