New global rules mean cruise lines will pay for carbon emissions, but is the US onboard?

New global rules mean that cruise companies will now have to pay for their carbon dioxide emissions after the deal was agreed on by the International Maritime Organization (IMO) in London on Friday. The IMO controls 97 per cent of the world’s shipping fleet. 

Shipowners will have to pay up to $380 per tonne of carbon dioxide emitted unless they take steps to cut their emissions. As covered by Skift, the rules are set to get stricter over time. By 2035, ships will need to cut emissions by 43 per cent, if they go over this limit, they will need to pay extra.

The IMO is part of the United Nations and sets rules for shipping, vessel standards, and safety. The news rules will apply to all vessels over 5,000 tonnes, including cruise and passenger ships.

The legislation makes the shipping industry the first to agree on fines for emissions.

Who is on board?

Participating countries will need to adopt the agreement into their laws by 2028, which, if you’re reading current affairs right now could be a little bit tricky. The US, led by the famously not-climate-conscious Donald Trump, withdrew from the decarbonisation talks before the agreement took place, according to Reuters. 

A US State Department spokesperson confirmed last week that Washington would not be ‘engaging in negotiations’ with the IMO because it is the administration’s policy to put US interests first when it comes to international agreements.

Saudi Arabia, Russia, and the UAE also pushed back on the negotiations, however, they eventually joined countries in backing a compromised deal.

The IMO said the measure is estimated to raise about US $10 billion a year, with the funds going towards a net-zero fund and developing cleaner fuels.

What does this mean for agents?

It is too early to say what the changes mean for agents, however the legislation could potentially lead to price increases as cruise lines factor in the extra cost and work on developing more sustainable ships.

Cruise Lines International Association (CLIA) said in a  statement: “Last week, CLIA participated in the IMO Marine Environmental Protection Committee Meeting (MEPC 83) as part of the consultative status we hold as a nongovernmental organization. During the meeting, IMO Member States agreed to circulate amendments to MARPOL Annex VI for a Net-Zero GHG Framework with a view to adoption in October. We will continue to analyze the framework on behalf of our members and how it could help close the cost gap between zero- and near-zero GHG fuels and traditional fuels.”

“It remains critically important that the IMO requirements remain realistic, and that regional or national revenue-generating programs are avoided or harmonized with IMO requirements to prevent double counting of emissions or related payments into more than one system.”

“CLIA and our cruise line members remain committed to pursuing net-zero emissions by 2050 and will continue to pursue multiple paths to fulfil that ambition. We also continue to call on governments and fuel providers to do their part to help bring the needed alternative fuels to the market at scale.”