A “heated” debate over how to slash carbon pollution from global shipping is unfolding this week, as countries consider a first-of-its-kind tax on maritime emissions.

The decision—set to be made in London by more than 170 member states at the International Maritime Organization’s (IMO) Marine Environment Protection Committee (MEPC 83)—could transform one of the world’s most carbon-intensive industries.

Their options are a flat levy per tonne of emissions or a carbon-trading scheme—or a mix of both.

“The IMO cannot be seen to close this milestone MEPC meeting on a ‘no deal’ basis,” writes Andy Wibroe, lead regulatory specialist at Lloyd’s Register, a maritime professional services organization. “It is not expected to be a hostile meeting, but there are many heated discussions already taking place in back rooms and corridors that will continue in the lead up to the meeting.”

The IMO is expected to close the meeting with a consensus, Wibroe adds.

A United Nations agency that oversees maritime transport, the IMO is charged with addressing the sector’s pollution. From April 7 to 11, its MEPC will meet to discuss measures for short- and long-term emissions targets.

Short-term emissions discussions will focus on the Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII), which measures the carbon efficiency of ocean transport, writes Wibroe.

But mandates that address long-term emissions—especially the IMO target set in 2023 to reach net-zero “by or around 2050”—have consumed discussions over the past months. IMO Secretary-General Arsenio Dominguez, who has called out the industry for not doing enough to address its pollution, said the committee will “set the course” for the industry’s net-zero future, writes the Associated Press.

The outcome could be the first emissions tax ever implemented in a global industry.

“If an agreement is reached, it would represent a huge moment of solidarity in the fight to tackle climate change,” said Emma Fenton, senior director for climate diplomacy at the United Kingdom-based nonprofit, Opportunity Green. “For the first time, we will have, hopefully, an effective global framework tackling this international issue. Most emissions are tackled domestically.”

But IMO members are at a standoff over the two possible strategies for implementing the tax. Some, including more than 60 countries led by Pacific Island nations, are calling for a straightforward levy on all emissions.

Others—including China, Brazil, Saudi Arabia, and South Africa—favor a carbon credit trading model where compliant ships get credits for staying under an emissions limit, and non-compliant ships buy credits to operate above that limit.

A.P. Møller-Maersk, better known as Maersk, the world’s largest ocean shipping company, has endorsed the flat levy, warning that a trading scheme could encourage a shift to liquefied natural gas (LNG) instead of full decarbonization, reports The Financial Times.

Supporters of the trading system argue that a flat levy would unfairly burden remote, vulnerable economies that rely almost entirely on sea transport and lack access to clean energy alternatives. But advocates for the levy say carbon trading will not close the cost gap between fossil and low-emission fuels fast enough. Some countries have proposed a compromise between the two deals.

Some powerful countries, including the United States, oppose the tax overall, raising concerns that no deal will be reached. But a decision to implement the tax could provide essential funding for climate-vulnerable countries at a time when the U.S., led by Donald Trump, is withdrawing significant amounts of climate finance, writes Irish broadcaster RTE.

The shipping industry is a foundational part of the world economy and transports between 80% to 90% of the goods traded globally. It has remained dependent on fossil fuels, and despite its lower emissions intensity compared to other transportation like aviation, it generates up to 3% of global emissions due to its scale. This could rise to 10% of global emissions by 2050 without effective action, writes Transport & Environment.

Switching ships to lower-emission fuels faces supply challenges and a lack of infrastructure, writes Deloitte. However, there is potential to reduce fuel use through technologies like wind propulsion, and Maersk has signed deals to begin sourcing green methanol as an alternative to conventional fossil fuels.