The Impact of IMO Market-Based Measures on Korean Shipping Companies: A Focus on the GHG Levy

Hanna Kim and Sunghwa Park ()
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Hanna Kim: Maritime Policy Research Department, Korea Maritime Institute, Busan 49111, Republic of Korea
Sunghwa Park: College of Business Administration, Gyeongsang National University, Jinju-si 52828, Gyeongsangnam-do, Republic of Korea

Sustainability, 2025, vol. 17, issue 14, 1-27

Abstract: This study examines the effects of the International Maritime Organization’s (IMO) market-based measures, with a particular focus on the greenhouse gas (GHG) levy and on the financial and operational performance of Korean shipping companies. The analysis estimates that these companies, which play a vital role in global trade, consume approximately 9211 kilotons of fuel annually and emit 28.5 million tons of carbon dioxide. Under the lowest proposed carbon tax scenario, the financial burden on these companies is estimated at approximately KRW 1.07 trillion, resulting in an 8.8% reduction in net profit, a 2.4% decrease in return on equity (ROE), and a 1.1% decline in return on assets (ROA). Conversely, under the highest carbon tax scenario, costs rise to KRW 4.89 trillion, leading to a significant 40.2% decrease in net profit, thereby posing a serious threat to the financial stability and competitiveness of these firms. These findings underscore the urgent need for strategic policy interventions to mitigate the financial impact of carbon taxation while promoting both environmental sustainability and economic resilience in the maritime sector.

Keywords: IMO market-based measures; GHG levy; carbon tax; Merton model; financial stability; Korean shipping company (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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