Why was Hawaii's 'Green Fee' on cruise ships blocked by US court? All you need to know

Hawaii's 'Green Fee', which was the first US tax on tourists to support climate change initiatives, was passed on Thursday, but with a catch: it was missing a crucial provision.

In general, the Green Fee increases the Transient Accommodations Tax (TAT)—which is a statewide tax on temporary living spaces occupied by visitors, such as hotel rooms or rented apartments—from 0.75 per cent to 11 per cent statewide.

However, on Wednesday, the Ninth US Circuit Court of Appeals temporarily blocked one critical provision of the Green Fee subject to appeals: a new 11 per cent tax (under the TAT) on cruise ship passenger bills, as per a DC News Now report.

The US court injunction was a response to an appeal by the Cruise Lines International Association (CLIA), a global body representing the cruise industry. Notably, earlier in December 2025, the court had rejected a CLIA appeal to block the cruise tax provision.

The CLIA has been fighting against the cruise tax provision since August 2025, suing the state and arguing that the surcharge unfairly targeted passengers by adding hundreds of dollars to the price of Hawaii cruises.

It has also flagged the county-wise surcharges on top of the 11 per cent tax—effectively taking it to 14 per cent.

In November, the US Department of Justice also filed a motion in a Hawaii court, urging that the federal government be allowed to intervene in the CLIA lawsuit against the Green Fee's cruise tax.

The DOJ has said that Hawaii did not have the power to charge cruise ships such a fee, claiming that only Congress had the power to pass and/or regulate such maritime taxes for vessels entering a port.

“This case involves important questions about how federal and state laws interact in regulating maritime commerce—principles rooted in long-standing constitutional safeguards that protect free and open ports nationwide,” a CLIA statement read, after the December 31 injunction.

“On behalf of its member cruise lines, CLIA will continue to pursue this matter constructively through the courts while working with Hawaii to support local communities and sustainable tourism," the statement added.

The new Green Fee was estimated to raise about $100 million a year in revenue to fund climate change mitigation efforts for Hawaii’s environment. As per the bill, portions of the revenue raised would go into the 'Climate Mitigation and Resiliency Special Fund' and the 'Economic Development and Revitalization Special Fund'.

The money would also be used to fund a "green jobs youth corps", as well as areas of environmental concern.

“Visitors who benefit from our island’s resources have a shared responsibility to help preserve them. The Green Fee ensures that the resources needed to protect Hawaii are available for future generations," said Hawaii Governor Josh Green.

Toni Schwartz, spokesperson for the Hawaii attorney general’s office, had also declared that the office was "confident that Act 96 is lawful and will be vindicated when the appeal is heard on the merits", as per the report.