agenda at a meeting of the industry's top regulatory body in London this week.

The week-long U.N. International Maritime Organization (IMO) meeting will decide how best to reduce CO2 gases, either by imposing a fuel tax, or using more complex market-based instruments like emissions trading.

"The big issue this week is with these so-called market-based instruments and whether shipping is included in an emissions trading scheme at a global level," said Simon Bennett, secretary at the International Chamber of Shipping.

The IMO hopes the action plans agreed will be enough to prevent the United Nations from imposing its own emissions rules at a Climate Change Conference in Copenhagen in December 2009.

Shipping contributed about 3.5 percent of global CO2 emissions in 2007, more than previously thought, a scientific report commissioned for the IMO earlier this year found. That compared with about 2 percent from aviation in 2005. But it is climbing as global seaborne trade expands.

Both sectors are excluded from national measures of CO2 emissions under the Kyoto Protocol on warming -- the only emissions excluded from inventories under the treaty which critics say leaves them in a policy blind spot.

Billed as one of the most critical to the sector in years, insiders say it is the last chance for the industry to tackle warming gases. The industry has been criticized for dragging its feet over emissions.

Bennett said world shipping, which carries 90 percent of the world's traded goods by volume, was trying to avoid having regional standards imposed on it which it says would damage it.

"It has to be done within the context of IMO," he said. Bennett said the European Commission, the European Parliament and regulatory bodies in the United States have been happy to give the IMO room to come up with a solution by the end of 2009.

"But the industry through IMO must now deliver or they will impose their own regional standards."