During the International Maritime Organization (IMO) climate talks in London this week, 13 additional countries support a global carbon levy on shipping. These are (on background): Dominica, Georgia, Grenada, Kiribati, Malawi, Mexico, Namibia, Nauru, New Zealand, Senegal, Switzerland, Trinidad and Tobago, and Türkiye.
The countries align themselves on the issue with 48 states from the Caribbean, the Pacific, Africa, Asia and Europe–a majority of the world’s shipping fleet–agreeing a future levy should be in the price range of $18-150/tonne of greenhouse gas. (Dominica, Senegal and Switzerland supported a levy for the first time.)
In parallel to carbon pricing, governments also negotiate on a global fuel standard (GFS), aimed at driving up the use of zero-emission energy on ships to effectively fully power the sector by 2050. Ahead of this week’s discussion, T&E and +60 conservation NGOs called against the inclusion of biofuels in the shipping’s future energy mix.
Key questions regarding the exact price, scope and revenue distribution of the levy, as well as the details of the GFS, still remain to be resolved.
Why this matters: This week’s discussion lends further political momentum to get a carbon levy finalised in April and adopted in October at the IMO, which would be the world’s first universal fee on an international polluter. A deal at the IMO would revitalise international co-operation and multilateralism at UN fora and ahead of the COP.
Blánaid Sheeran, Policy Officer, Climate Diplomacy, Opportunity Green, said: “While we’re confident that IMO Member States will meet the ambitious timeline they set themselves, ISWG-GHG 18 showed how much progress is still needed on some key issues, in particular the economic measure. We saw strong support this week from over 50 countries, several speaking for the first time, for a levy or contribution that places a price on all of shipping’s GHG emissions. In spite of this, there remains a serious risk that a strong pricing mechanism that prioritises justice and equity will not be adopted. It’s crucial that Member States stand by their commitment to promote a just and equitable transition for international shipping.”
Christiaan De Beukelaer, Senior Lecturer at the University of Melbourne, said: “This week, a growing group of African, Caribbean, Pacific, Asian, Latin American, and European countries spoke out in support of a shipping levy that would deliver on the IMO’s unanimously adopted decarbonisation strategy. Such a levy would mean a major breakthrough for climate action. However, countries that account 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 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.”
The IMO is set to finalise some form of carbon pricing on April 7-11 and adopt it in autumn 2025, as a way to achieve its global climate commitment.
Expert economists at UNCTAD say a levy is necessary as the best way to deliver shipping’s energy transition in a low-cost way, and generate revenues for climate adaptation and mitigation in and out of the sector. The World Bank estimates that a levy of $100/tonne GHG would generate up to $60 billion a year in revenues (how much of this should be allocated to developing and climate-vulnerable countries is a big ongoing discussion at the IMO).
The IMO’s 176 member states met this week in London for an “intersessional” round of negotiations (ISWG-GHG-18), before the big summit in April (MEPC 83).
Source: Global Strategic Communications Council (GSCC)