Brazil has submitted a formal proposal to the International Maritime Organization urging that any incentive framework for cleaner shipping be structured around verified emissions reductions — not the promotion of individual fuel types. The submission, reported by Ship & Bunker, signals a significant position heading into one of the IMO’s most consequential regulatory meetings of the year.
Brazil’s Core Argument
According to Ship & Bunker, Brazil filed its proposal with the IMO’s Marine Environment Protection Committee (MEPC) on March 4. In it, Brazil argues that the central question is no longer whether to place a price on maritime emissions, but rather “how to introduce additional rewards for ZNZs [zero or near-zero technologies and fuels] without undermining the cost-effectiveness of the overall policy package.”
The proposal identifies three incentive approaches currently under consideration at the IMO level:
- Price gap-linked incentives — rewards tied to the cost differential between conventional and cleaner fuels
- Emissions-reduction rewards — incentives based on the actual volume of emissions avoided
- Multiplier systems — mechanisms that increase the compliance value of lower-emission fuels
Why Brazil Rejects Price-Linked and Multiplier Mechanisms
Brazil raises pointed concerns about the first and third approaches. On price-linked systems, the proposal warns that “bunker prices are highly volatile due to geopolitical shocks” and can serve as “a weak guide for long-term investment,” as reported by Ship & Bunker. The country also notes that such mechanisms risk uneven carbon pricing and could give an advantage to fuels that are already near commercial readiness.
Multiplier systems draw similar criticism. Ship & Bunker reports that Brazil argues these reward fuel adoption rather than actual emissions cuts, which could distort competition across different fuel pathways.
An Abatement-Based Alternative
Brazil’s preferred model centres on what the proposal calls abatement-based rewards — subsidies tied directly to verified emissions avoided, providing, in Brazil’s words, “a uniform marginal incentive per unit of emissions reduction.”
The submission makes clear that “fuel-specific adoption is not the objective… Rather, the objective is to achieve a given emissions-reduction pathway at minimum social cost.”
MEPC 84 on the Horizon
The proposal is timed ahead of the 84th session of the Marine Environment Protection Committee, MEPC 84, which Ship & Bunker reports is scheduled to take place from April 27 to May 1. The session is expected to address the design of the IMO’s net-zero framework and related incentive mechanisms — making Brazil’s submission a notable entry into what promises to be a sharply debated agenda.
Gulf Bunkering does not provide operational or security guidance. This article is for informational purposes only. Operators should consult flag state authorities, P&I clubs, and relevant advisories for decisions relating to transit planning.
Sources: Ship & Bunker
