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Governments and the shipping industry are considering a carbon tax, but it could be derailed by the blockade of the Strait of Hormuz and the ensuing energy crisis.
The closure of the strait, which has led to soaring costs, has boosted opposition to the UN-led efforts to create a carbon tax for shipping as part of a Net Zero Framework.
A coalition of the world’s leading three ship registries – Liberia, Panama and the Marshall Islands – plus oil exporters such as Saudi Arabia’s Bahri, urged members of the UN's International Maritime Organisation to consider alternatives to the original plan at the meeting this week. “Support for the framework in its current form has continued to erode” since the IMO meeting last year, they said in a statement.
EU countries agreed last week to keep pushing for a global price on shipping's CO2 emissions at the IMO this week. But US opposition to the levy, compounded by the energy crisis, could lead to a clash. The plan was postponed last year after strident opposition from the Trump administration.
The IMO's secretary general, Arsenio Dominguez, urged members to work towards a “shared understanding” following a fraught meeting last October which led to the vote on carbon tax being shelved.
“My request to you is that we engage in constructive and pragmatic exchanges. Listen to one another, there is no need to argue,” he said. “We are adult enough to agree to disagree. There is no reason to repeat what happened last October.”
He added that the carbon intensity of international shipping had fallen by 38 per cent since 2008. “This demonstrates that action to reduce fuel consumption, save costs and improve efficiency is possible today,” he said.
Mr Dominguez defended the proposal at a press conference on Monday and said it received broad support.
"The support for the measures remains there. It’s how we’re going to understand and address the challenges that have been put forward," he said.
He added that they could not ignore the economic impact of the Iran war and how that was likely to shape attitudes towards a further tax on shipping.
"We can’t be blind to what is happening around the world right now. We have to do that analysis as well or be cognisant of how the economy has also been impacted," he said.
"We wanted just an equitable transition, not to make these more difficult," he said.
He was confident that members would agree on a procedure to revive the vote on the levy this week.
"The focus for me is that we maintain momentum and the negotiations will move ahead when we’re going to agree on all the different proposals," Mr Dominguez told reporters.
Although the agency was working on an evacuation plan for the ships stranded in the Arabian Gulf, this would not go ahead until the hostilities ended.
"Freedom of navigation is not negotiable for the IMO and no country has the right to obstruct the traffic on a strait for international navigation," he said.
US opposition has not stopped European countries from attempting to revive the plan, according to the EU's negotiating position for the next IMO talks, seen by Reuters. EU countries “shall oppose any attempts” to stop the climate measures from being negotiated at the meeting, the document said, and they will consider changes to the original carbon pricing plan if this helps gather support.
Three tankers were attacked by Iran last week as they attempted to cross the strait in the belief that a ceasefire was in place, prompting the IMO’s head to warn "there is no safe transit anywhere in the Strait of Hormuz".
At least 29 vessels have been attacked since the beginning of the crisis, the IMO said, resulting in the deaths of at least 10 seafarers and damage to vessels. About 20,000 seafarers and 1,600 vessels remain in the Gulf.
But some EU officials have also expressed doubts that the carbon levy could pass a vote this year. Norway's Environment Minister, Andreas Bjelland Eriksen, said the IMO still had a chance to strike a historic deal, but had to look at “different approaches” to avoid a repeat of last year's failure.
“Also, whether we can do some things now and potentially postpone other parts of the regulation to a later stage, for example,” he added while speaking to journalists.
China and major shipping countries, including Liberia, were among the 57 countries that voted to delay the carbon levy last October, against 49 that voted to pass a deal. Greece, Malta and Italy declined to endorse the new EU negotiating position, which was passed by a reinforced majority of EU countries, officials said.
