There is a debate on which Market-based Mechanism (MBM) international shipping should adopt to mitigate CO2 emissions. Literature presents three preferences: one supports fuel levy, another supports Emissions Trading System (ETS), while the last remains neutral. This study aims to investigate: which MBM is suitable to mitigate CO2 emissions for international shipping? The authors conclude that fuel levy is more suitable due to higher effectiveness in generating funds, encouraging R&D and technology adoption. ETS is harder to implement as it requires more man-hours to set-up, operate and review. ETS with full auctioning of credits becomes marginally comparable to fuel levy.