Brazil Urges the UN to Reject Proposed Global Shipping Levy

• Feb 17, 2025

Brazil has called on the United Nations to reject plans for a new levy on global shipping, which aims to generate funds to combat the climate crisis. This comes despite Brazil's role as the host of the upcoming UN climate summit later this year. The proposed levy would target carbon dioxide emissions from shipping, with supporters including the UK, EU, and Japan hoping it will raise billions of dollars annually to help poorer nations tackle the effects of climate change.

However, Brazil, alongside China, Saudi Arabia, and 12 other nations, submitted an opposition letter to the International Maritime Organization (IMO) on January 31. These countries argue that the levy would negatively impact developing economies by reducing exports, raising food prices, and exacerbating inequalities. They claim that such a levy would not facilitate a just transition to low-carbon shipping and could trigger broader economic setbacks.

The opposing nations also believe the levy is unnecessary to meet the IMO’s targets for greenhouse gas reductions.

Despite this opposition, experts suggest that the levy could still pass if the IMO takes a strong position, as a majority of countries — representing about two-thirds of the global shipping fleet — are believed to support it. Some countries may even be swayed by concessions regarding the levy’s structure and the way funds would be allocated.

The proponents of the levy are largely those nations most vulnerable to climate change, many of which are among the world’s poorest. This situation puts countries like Brazil and China in a difficult position, as they may be seen as opposing measures supported by the very nations most at risk from climate impacts.

According to estimates cited in the submission, the levy’s effect on global GDP would be modest, reducing it by only 0.03% to 0.07%.

Brazil, which will host the COP30 climate summit in Belém, at the mouth of the Amazon, has been intensifying its diplomatic efforts on climate action, including pushing for a global wealth tax on billionaires to fund climate adaptation and development aid in poorer countries. The country’s stance on the shipping levy, however, has been linked to its heavily export-dependent economy.

John Maggs, from the Clean Shipping Coalition, noted that Brazil is concerned that the levy could disproportionately affect its large exports of dry goods.

If consensus proves elusive, the IMO may decide to push through the levy despite opposition, as the organization sometimes enforces decisions when it cannot reach agreement among its 176 member states. IMO Secretary-General Arsenio Dominguez emphasized the importance of finding common ground, noting that members had previously agreed to adopt an emissions pricing mechanism this year.

Complicating matters is the uncertain position of the United States under President Donald Trump. The IMO is not considered a priority for his administration, and the U.S. has not taken a formal stance on the levy. Some experts believe the U.S. may remain neutral. However, Trump's history of imposing tariffs raises concerns among countries reliant on global trade.

Delaine McCullough of Ocean Conservancy argued that Trump’s proposed tariffs would have a far greater disruptive impact than any shipping levy.

Friederike Roder, director of the Global Solidarity Levies Task Force, which advocates for financing climate action through levies, pointed out that stable, predictable financing mechanisms, such as the proposed levy, are crucial for supporting development, particularly given recent cuts to U.S. aid under the Trump administration.