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Carbon Levy in the Shipping Industry

Dec 20, 2022


A carbon price is one of the many enablers that can propel organizations to embark on a de-carbonization journey if implemented judiciously.

In 2018, global shipping emissions represented 1076 million tons of CO2, and were responsible for around 2.9% of global emissions caused by human activity. Maritime nations such as the US, Japan and many EU member states are taking many necessary steps to cut emissions in this carbon intensive industry. The International Maritime Organization (IMO) has proposed to discuss a carbon levy on shipping, which will raise the cost of fossil fuel initially by $100/ton, rising to about $300/ton by 2030.

Concerns were however raised that such a tax would percolate down the supply chain to the customers and end consumers of the shipping line, even affecting the poorest of the population that cannot afford it. Additionally, the large percentage of increase could raise inflation and result in food shortage as essential crops like corn and soya are diverted to fuel production and agricultural land gets repurposed to generate bio-fuel. It thus becomes essential to ensure that any carbon taxing mechanisms insulate customers from inflationary effects. 

The far-reaching impacts of climate change will leave no facet of life as we know it untouched, and the rate of deterioration continues to increase exponentially. Climate change needs to be confronted, addressed, and resolved as a collective effort. A price on carbon is one of the many enablers that can propel organizations to embark on a de-carbonization journey if implemented judiciously. 

Shipping companies must actively plan out the best emissions reduction pathway in the short, medium, and long-term for sustainable success. To help manage higher operating costs, many businesses are already taking measures to improve energy efficiency. ENPOSS has a history of successful collaborations with shipping companies. We can help businesses be competitive in a low-carbon future, by contributing to cutting operating energy costs and by facilitating economic activities that are aligned with a low-carbon future. Invest in your future by collaborating with ENPOSS today. 

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