Brazil asks UN to ditch proposed levy on global shipping

The Guardian

17-02-2025

Brazil has asked the UN to throw out plans for a new levy on global shipping that would raise funds to fight the climate crisis, despite playing host to the next UN climate summit.
The proposed levy on carbon dioxide emissions from shipping will be discussed at a crunch meeting of the International Maritime Organisation (IMO) that begins on Monday. Those supporting the deal, including the UK, the EU and Japan, are hoping the levy will raise billions of dollars a year, which could be used to help poor countries cope with the effects of climate breakdown.
Brazil, China, Saudi Arabia and 12 other countries made a submission to the IMO on 31 January opposing the plans. They argued a levy could reduce exports from the developing world, raise food prices and increase inequalities.
They wrote: 'A levy would not deliver a just and equitable transition [to low-CO2 shipping] and its adoption may trigger negative, economy-wide impacts … a levy is a fundamentally divisive proposal.'
The countries also claim a levy is not needed to meet the IMO's greenhouse gas reduction targets.
Experts said the levy could still pass despite this opposition, if the IMO took a firm stance. At least 46 countries, representing about two thirds of the global shipping fleet, are thought to favour a deal. Some countries may also be won round through concessions on how the levy could be used, and the level at which it is set.
The countries that are keenest on a levy are those most at risk from climate breakdown, many of them among the planet's poorest. It will be hard for countries such as Brazil and China to present themselves as champions of the developing world if they are pitted against what the most vulnerable nations are calling for.
The impact of the levy is likely to be small in overall terms, reducing GDP by between 0.03% and 0.07%, according to estimates quoted in the submission.
Brazil will host the Cop30 UN climate summit this November in Belém, at the mouth of the Amazon. The country has been engaged in intense diplomacy for the past year, and stepped up further last month with the appointment of the Cop president-designate, the veteran diplomat André Corrêa do Lago.
Brazil has also called for a global wealth tax on billionaires to fund development aid and climate adaptation efforts in poor countries.
But maritime campaigners said Brazil's stance on a shipping levy was the result of its highly export-dependent economy.
John Maggs, shipping policy director at Seas At Risk, said: 'Brazil is very sensitive, in thinking that because of its exports of large quantities of dry goods, the levy would have a greater impact.'
If there is little sign of agreement, the IMO could force discussions to a point. By longstanding tradition, the organisation tries to seek consensus, but some measures have been forced through in the past despite disagreement from some of the 176 member states.
Arsenio Dominguez, secretary general of the IMO, said he would 'focus on identifying common ground and build consensus', and pointed out that members had previously agreed to adopt some form of emissions pricing mechanism this year. He said: 'The complexities cannot be underestimated. [But] I am positive that we can achieve the required progress to meet our timeline.'
A further complicating factor is Donald Trump's presidency of the US. The IMO is not thought to be one of his priorities, and the US has not formally adopted a position on the levy in the past. Some think the US could 'sit this one out', in the words of one diplomat.
But even if the US does not obstruct a deal, Trump's threats of sweeping tariffs are deeply unsettling for countries concerned about global trade.
Delaine McCullough, a campaign manager at Ocean Conservancy, pointed out that Trump's tariffs were far more disruptive than any likely impact from a shipping levy. 'The cost of a levy would be dwarfed by the tariff levels [Trump is proposing],' she said.
Friederike Roder, director of the secretariat for the Global Solidarity Levies Task Force, which brings together countries calling for levies to fund climate action, said Trump's actions on freezing USAid showed the need for stable, predictable means of financing development, of the kind that only levies and similar mechanisms can provide.
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'It shows how important aid is, and the real life impacts of not having enough finance,' she said.
The taskforce, set up by Barbados, France and Kenya, and now with 17 members, is consulting on proposals for levies on airline tickets, financial transactions, cryptocurrency and taxes on fossil fuels, and will push for agreement on some of these at the Cop30 summit in Brazil.
Roder said levies could work even if all countries did not participate. 'There's good evidence showing you can design them in a way that it works without global agreement,' she said. 'And we see from polling that people are extremely worried about climate change. Heavily polluting sectors should be taxed more than cleaner parts of the economy.'
Among the likely flashpoints in the shipping levy discussions are the questions of how the proceeds from the levy should be spent, and the level at which it should be set.
Some within the shipping industry want all the revenues to be devoted to helping countries and companies move to lower-CO2 fuels and vessels. But many poor developing countries vehemently oppose this, arguing that the revenues should be considered as climate finance, to help them cut their greenhouse gas emissions and adapt to the effects of extreme weather.
In a proposal submitted in January, the International Chamber of Shipping and countries including the UK and Japan, as well as the EU, suggested the levy should be set between $18.75 (£14.95) and $150 (£120) per tonne of CO2. Even the upper end of the scale is likely to be the minimum needed to encourage real change in shipping practices, according to Maggs.
The five-day negotiating session at the IMO headquarters in London, which ends on Friday, will be followed by another round of talks in March, before a decision is due to be taken in April. Talks on climate issues at the IMO have a history of dragging on. It was originally hoped that the levy would be agreed, after years of talks, in the summer of 2023, but that round failed – and it took most of the past two decades to force countries and their shipping industries to accept the need for mandatory CO2 reductions.
As well as the carbon levy, the talks will cover a 'carbon intensity indicator', fuel standards and energy efficiency. These are also essential for reducing the CO2 output of the shipping industry, which accounts for about 3% of global greenhouse gas emissions.
In part because of the way that shipping contracts are drawn up, ships tend to get to ports as quickly as possible, even if they know there is no berth ready for them, in which case they linger near the ports until ready. This 'go fast and wait' strategy is wasteful of fuel, and produces far more CO2 than necessary – a reduction of 10% in speed would equate to a 20% cut in emissions, according to Maggs.
Agreeing on CO2 targets and efficiency measures could make a vast difference in the short term, he said. 'It's a very potent way to bring emissions down quickly.'