UN carbon levy talks: Now is the time to show solidarity with climate vulnerable countries

A global carbon price on shipping—the world’s ‘first’ global carbon pricing on any sector—is being negotiated as part of measures to deliver the International Maritime Organization’s (IMO) climate commitment: an equitable transition to zero-emissions by 2050.

The IMO met in a technical working group ISWG-GHG-19 meeting from March 31 to April 1, 2025, to close in on a carbon price on global shipping, before its finalization at a climate summit next week (MEPC 83).

The IMO promised to adopt an ‘economic’ measure based on a ‘greenhouse gas (GHG) emission pricing’ and a ‘technical’ measure, a global fuel standard (GFS), to deliver its agreed emission cuts in an equitable way: 30% by 2030, 80% by 2040, to reach zero by 2050.

Carbon pricing would help close the price gap between fossil fuels and renewable energy, and generate revenues for an equitable transition.

As informed, the levy remains on the table but is integrated with the GFS, the technical measure that aims to incentivize the use of green energy and fuels, as a single policy.

This single mechanism now encompasses both economic (carbon pricing) and technical (fuels standard) elements. If it is set ambitiously, all ships would have to pay to emit. This would generate stable and predictable revenues for an equitable energy transition that incentivizes the industry.

Pacific, Latin American, Caribbean and African countries, with the support of the UK, continue to push for a levy within the new architecture of a single policy. The Pacific Island states set a red line for the option to make all ships pay to emit any greenhouse gases.

China and India have indicated openness to the need for stable revenues, suggesting amendments to the GFS that would stabilize revenue generation. Their position has now surpassed the ambition of the EU on the fundamental policy design.

However, the EU is being weak in not standing by its own proposal for a $100 levy (capable of generating up to $60 billion dollars a year) by supporting a ‘weak architecture’ of the future mechanism, aiming to generate only $30 billion dollars a year. There are serious concerns in the room that even this level of revenue would not be reached.

“The universal levy remains on the table — and that’s essential. A growing bloc of countries, particularly from Africa, the Caribbean, Central America, and the Pacific, is united in its focus on delivering ambition and equity for the Global South. But when it comes to equity, our voices continue to be ignored. I have real concerns that the package being shaped may not be one that truly protects the most vulnerable or ensures no one is left behind,” Ambassador Albon Ishoda, Marshall Islands Special Envoy for Maritime Decarbonization, said.

“At the close of the ISWG meeting it is vital for delegates to remain focussed on achieving the high level of ambition that was first proposed by the Pacific nations in their calls for an ambitious price, flat rate levy to ensure effective decarbonisation and a just and equitable transition. Now more than ever developed countries must stand in solidarity with the calls from climate vulnerable countries and agree measures that will achieve this essential outcome,” Emma Fenton, Senior Director, Climate Diplomacy, Opportunity Green, emphasized.

“Pacific Environment continues to call for a robust levy framework as championed by Pacific, African, and Caribbean nations, paired with a stringent fuel standard. It is critical for the IMO to adopt a measure that will close the cost gap between fossil fuels and truly sustainable fuels and set the sector on the path for a transition that is just and equitable for all. We are watching for potential loopholes, such as the exclusion of certain emissions or trade routes, that would weaken the measure and leave climate vulnerable and developing countries without a lifeline against the effects of climate change,” Jamie Yates, Climate and Renewable Energy Analyst, Pacific Environment, noted.

A study by UNCTAD, commissioned by the IMO, found that a levy of $150-300/tonne of greenhouse gas, if designed correctly, is the best way to minimize the economic impacts of shipping decarbonization on global GDP growth and to promote global economic equality.

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