India Among 63 Nations Backing Historic Global Carbon Tax on Shipping Industry

In a landmark decision for global climate policy, India and 62 other countries have voted in favour of the world’s first-ever global carbon tax on the shipping industry. The vote took place at the International Maritime Organisation (IMO) headquarters in London after a week of intense negotiations.

The agreement marks the first time a global carbon tax has been imposed on an entire industry, aiming to curb greenhouse gas emissions from maritime transport and accelerate the adoption of cleaner fuels. Starting in 2028, ships will either have to transition to low-emission fuels or pay a fee for their carbon output. The tax could raise up to USD 40 billion by 2030.

Despite being hailed as a breakthrough, the deal has faced criticism for falling short of climate justice. Revenue generated from the carbon tax will be ring-fenced exclusively for decarbonising the maritime sector and not used to fund broader climate adaptation or recovery efforts in vulnerable nations.

Supporters of the policy include India, China, and Brazil, while oil-rich countries such as Saudi Arabia, the UAE, Russia, and Venezuela opposed the measure. The United States abstained from voting and did not participate in the negotiations.

Smaller and climate-vulnerable nations, including those from the Pacific, Caribbean, Africa, and Central America, pushed for a portion of the tax revenue to support global climate finance. Tuvalu, speaking on behalf of Pacific Island countries, criticised the deal for lacking transparency and ambition. Vanuatu’s Climate Change Minister, Ralph Regenvanu, accused major fossil fuel producers like Saudi Arabia and the US of “blocking progress at every turn.”

The new pricing mechanism will charge ships based on the intensity of their emissions. In 2028, ships using traditional fuels will pay up to USD 380 per tonne for their most polluting emissions and USD 100 per tonne for excess emissions beyond defined thresholds. The charges are expected to gradually penalise fossil fuel use, including liquefied natural gas (LNG).

However, experts warn that the current framework may only reduce shipping emissions by 10% by 2030—far below the IMO’s own target of a 20% cut by the same year.

While the basic structure has been agreed, key technical aspects, including revenue distribution and implementation mechanisms, will be finalised ahead of formal adoption in October 2025. Environmental groups and vulnerable countries have pledged to continue pushing for a fairer and more ambitious outcome.