Legal application of GHG emission pricing mechanisms to international shipping industry

The international shipping industry is critical to achieving the climate goals of the Paris Agreement. The Net-Zero Framework (NZF) adopted at the 83rd MEPC meeting includes carbon pricing mechanisms, and the EU Emission Trading System (EU-ETS) gradually covers the shipping industry starting from 2024. Greenhouse gas (GHG) emission pricing mechanism, as an important market tool to promote global GHG reduction, is extending from the level of national governance to the field of international shipping. There are many challenges in the legal application of the GHG emission pricing mechanisms to the international shipping industry. The unilateral expansion of the EU-ETS has led to disputes over extraterritorial jurisdiction. The implementation scope of NZF overlaps with that of EU-ETS, which may bring about problems of double regulation and double pricing. There is difficulty in determining the total volume of emission trading in shipping and the difficulty in identifying the responsible entities for trading. The GHG emission pricing mechanism in the shipping industry still faces the contradiction and coordination predicament between the principle of common but differentiated responsibilities and the principle of non-more favorable treatment. This article employs normative legal analysis and comparative methodology, explicitly adopting international law standards, including treaty interpretation under the Vienna Convention on the Law of Treaties, principles of state territoriality jurisdiction, flag state jurisdiction, port state jurisdiction, and state responsibility doctrines, as its analytical framework. Therefore, it is necessary to adhere to the leading position of IMO when building the GHG emission pricing mechanism in global shipping and achieve effective alignment between different instruments. CBDR-RC should also be adhered to by reasonably using GHG emission pricing revenues

Convention · Emissions trading · Greenhouse gas · International economic law · International shipping · Treaty · International Environmental Law and Policies · International Maritime Law Issues · Maritime Transport Emissions and Efficiency