The push for a global levy on international shipping emissions won additional support from another dozen countries during talks in London this week, but it is still opposed by a group of large emerging economies including Brazil, China and Saudi Arabia. The negotiations made little concrete progress, leaving much work ahead of a crunch meeting in April, according to observers.
More than 60 countries – including European Union member states, the UK, Japan, Nigeria and Kenya – have now swung behind the proposal, championed by Pacific island nations, to tax pollution from ships to reduce the sector’s planet-warning emissions and generate revenue for climate action. New backers include Malawi, Mexico, Namibia, New Zealand, Senegal, Switzerland and Türkiye.
But a group of 12 countries such as Brazil, China, Indonesia, Saudi Arabia and South Africa argue that a levy would hit developing nations the hardest and risk exacerbating food insecurity by increasing the cost of maritime trade.
Christiaan De Beukelaer, a senior lecturer at the University of Melbourne, noted that countries accounting for at least two-thirds of fossil fuel subsidies continue to stand in the way of a shipping levy.
“This includes Brazil, who is touting to be a leader in hosting this year’s [COP30] climate summit, yet just joined OPEC+, a group of major oil-exporting nations. These fossil fuel incumbents should not be allowed to block urgent climate action in the shipping industry,” he said.
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Slow progress
A week of talks ended at the International Maritime Organisation (IMO) in London on Friday with little concrete progress on if and how a levy should be adopted, while all options to accelerate emissions cuts by incentivising energy efficiency and deploying cleaner fuels and energy sources such as wind power still on the table.
“English porridge and Caribbean coffee during the week-long IMO negotiation was good, but we are running out of time to get our act together,” Faig Abbasov, shipping director at NGO Transport & Environment, told Climate Home News. “The dirty ship hasn’t moved an inch yet.”
Experts at the UCL Energy Institute, however, gave a more favourable view, reporting that the talks saw further “tidying up” of options and draft language for a potential agreement, and expressing the view that the process is on track to make key decisions in April.
Annika Frosch, research fellow at the institute, noted that support for a levy continues to grow, now grouping two-thirds of signatories to a key maritime treaty to prevent pollution from ships in “a diverse coalition” with key vessel flag states, including African nations, Small Island Developing States (SIDS), and Least Developed Countries (LDCs).
Plan for emissions controls by 2027
International shipping accounts for around 3% of global emissions. Countries have already agreed to cut shipping emissions by at least 20% from 2008 levels by 2030, at least 70% by 2040 and to reach net zero emissions around 2050.
Ambassador Albon Ishoda, the Marshall Islands’ special envoy for maritime decarbonisation, said that without a universal levy, the IMO’s climate targets would be meaningless. “This is the fastest, most effective, and lowest-cost way to ensure a just and equitable transition, where no one is left behind. Delays cost lives. The time for action is now,” he added.
The IMO wants to have carbon-cutting measures in place by 2027 – a timeline that would require countries to adopt new rules at key talks in October. The negotiations are set to resume in April, when an agreement is needed for countries to meet the October deadline.
The levy under discussion would force ship owners to pay for every tonne of greenhouse gases their vessels emit, making the use of more polluting fuels – like today’s oil-based bunker fuel – more expensive. Proponents argue this would incentivise the sector’s energy transition and provide the funding needed to ensure it is equitable and keeps costs as low as possible.
But in a submission to the IMO before this week’s talks, the group of opposing countries said “a levy would not deliver a just and equitable transition” and its adoption “may trigger negative, economy-wide impacts”. They argue the tax could reduce exports from developing countries, increase economic inequalities and impact food prices in low-income countries.
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Despite this warning, some of the world’s poorest and most climate-vulnerable countries, such as Liberia, for example, have joined the supporters of an emissions levy.
Delaine McCullough, the Ocean Conservancy’s shipping emissions policy manager and president of the Clean Shipping Coalition, described the new voices calling for the levy at the IMO this week as “one of the bright spots”.
“It was particularly encouraging to see Mexico and Panama act as regional leaders in this crucial discussion – we now need a rallying call by IMO member states to agree on strong global fuel standard and greenhouse gas levy as the best way forward for reducing emissions from the shipping sector,” she added in a statement.
Views differ on levy structure and use
The levy’s proponents are not yet all on the same page – there are still differing views on how much the levy should be and what the proceeds should be spent on. Analysts say these key points could be divisive if the principle of a levy is agreed at the talks.
Advocates of the levy have suggested a wide range of prices – from $18 to $150 per tonne of carbon dioxide emitted – with Pacific island nations backing the highest rate.
Equally, there are disagreements over whether the revenue should be used solely to accelerate the shipping sector’s transition to clean energy sources or to support climate action more broadly. Priority for low-income and climate-vulnerable countries is also up for discussion.
The UCL Energy Institute said, however, that there is broad support for a fund to help achieve a just transition and cushion the impacts of a global shift to greener shipping.
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In an attempt to bridge the broader divides, Singapore has suggested expanding proposals for a fuel standard so that ship owners would pay for emissions above a certain level. Under this proposal, ship owners would be required to keep emissions below two thresholds and incur lower penalties if they breach the most ambitious one. But it is unclear if the idea will win countries’ support.
Also notably absent from the talks has been any discussion on what should be permitted as a clean fuel – another highly contentious issue. “We should be especially vigilant as to how much space will be given to biofuels so that the cure isn’t worse than the disease,” said Abbasov of Transport & Environment.
