The shipping world held its collective breath over the second weekend in April and set their gaze towards London, where the Marine Environment Protection Committee (MEPC) met for the 83rd time in what would turn out to be a very contentious session. The main topic of the MEPC meeting was to decide on whether to implement a universal greenhouse gas (GHG) levy and/or a GHG fuel standard, both of which are aimed at hitting the International Maritime Organization’s green targets that push shipping to become a net-zero industry by 2050. However, the gathering was in the headlines as soon as it got started. The US delegation was noticeably absent, and the Trump administration threatened that it would look to add reciprocal charges if any US-flagged ships face higher fuel bills. In essence, Trump did what he did to the Paris Climate Agreement – abandon it completely. This adoption is a first step in the right direction From the outset, it looked like a universal levy was unlikely to happen, and a compromised text included tiered GHG fuel intensity requirements was introduced instead. In short, one of shipping’s most important green gatherings ever was abandoned by the US, and its key part was already dropped for softer solutions. The mother of all bad starts. When it was all said and done, MEPC delegates approved the GHG pricing mechanism proposal via an extremely rare majority vote instead of the usual consensus. It was passed with 63 in favour, 16 against, while 24 states abstained from voting. Those in favour included, among others, EU countries, the UK, and China, while Middle Eastern countries, supported by Russia and Venezuela, were against. To get the new pricing mechanism approved, the proposal will have to get a two-thirds majority at the October meeting. If it goes through, shipping will be the first transport sector to implement internationally mandated targets to reduce emissions. The proposal states that ships must reduce their fuel intensity by a base target of 4% in 2028 against 2008 levels. This increases over time to 30% by 2035. The text also defines a direct compliance target of 17% for 2028 and grows to 43% by 2035. So, what does that mean financially? The Tier 1 penalty is capped, based on the greenhouse gas fuel intensity (GFI) gap between the two targets, which is fixed from 2028 to 2035. Penalties are paid into an IMO-administered fund. If a ship’s fuel GFI falls between direct compliance and base targets, it incurs a penalty of $100 per tonne of CO2e. If the fuel’s GFI exceeds the base target, the ship pays the maximum Tier 1 penalty, and an additional Tier 2 penalty of $380 per tonne of CO2e for emissions above the base target. Over-compliant vessels will receive surplus units equal to their positive compliance balance, expressed in tCO2e, valid for two years after emission. Ships then will be able to use the surplus units in the following reporting periods, transfer to other vessels as a credit, or voluntarily cancel as a mitigation contribution. IMO secretary-general Arsenio Dominguez believes that the first revenues, set to be collected in 2028, will be around $11bn to 13bn. Also, according to figures from UCL Energy Institute, the carbon price will be $11 to $12 per tonne, or around $900 per vessel, per day. The measure will apply to all ships of 5,000 gt or above, excluding non-self-propelled ships and all platforms such as FPSOs, FSUs, drilling rigs, and semi-submersible vessels. But this is a solution which is