France seeks to rally support for emissions levy on shipping

France is drumming up support for a global levy on greenhouse gas emissions from the shipping industry ahead of a summit hosted by Emmanuel Macron this month.

Several people familiar with the discussions said France hopes to team up with other countries to issue a joint call for members of the United Nations’ International Maritime Organization to agree such a levy at its upcoming meeting in July.

France is seeking to build a coalition of dozens of nations to back the idea, and has won support from Japan, Denmark, Kenya, Panama and Mexico — along with the Solomon and Marshall Islands, which have championed the idea for years — said one of the people familiar with the situation.

If finalised, the call would be a key achievement to emerge from Macron’s summit for a new global financing pact, a two-day event the French president is co-hosting with the leader of Barbados on June 22-23 about climate finance and global financial reforms.

A French diplomatic official said: “This is an initiative that some of our partners have been supporting for a long time, and this summit will give them an important political platform. It is undeniable that we will need new sources of income to finance the fight against climate change, which is why we will support this initiative.”

The lobbying push comes ahead of an IMO meeting next month to discuss new targets for cutting emissions from the shipping industry. Shipping, which carries up to 90 per cent of global trade and largely relies on fossil fuels, is a major contributor to pollution but critics say it has been slow to decarbonise because of insufficient regulation.

The maritime organisation has previously set a target for shipping to halve annual greenhouse gas emissions between 2008 and 2050, falling short of net zero ambitions in other industries.

People present during previous talks said that industry lobbyists have opposed tougher measures, as have some member states with large shipping industries. Countries including Argentina, Saudi Arabia and China have been reluctant to support a levy, they say. 

The IMO typically makes decisions based on consensus among its members, but can also rely on a majority, said Tristan Smith, a shipping researcher at University College London.

The EU already plans to introduce shipping into its emissions trading scheme, under which shipowners travelling through European waters will pay for their pollution. But an agreement on a greenhouse levy at next month’s IMO meeting would impose a financial cost on shipping emissions globally.

If such a carbon levy was introduced, it would affect container shipping giants such as Switzerland’s MSC Mediterranean Shipping Company, Denmark’s AP Møller-Maersk, France’s CMA-CGM and their customers. 

However, it remains unclear what form a shipping levy would take. A proposal from the Solomon Islands and Marshall Islands, which are particularly exposed to rising sea levels, for a $100 a tonne emissions levy is considered the most developed, and has been discussed at working groups hosted by France ahead of the summit.

Under the islands’ proposal, the money generated could be used to develop new fuels and help countries deal with the impact of climate change, among other uses.

Last month a group of African nations said they would back a shipping levy used in part to help developing countries deal with climate change. 

But the French official said the planned announcement from the summit was unlikely to call for a specific level of levy or set out how the funds would be distributed. Such issues would have to be addressed later at the IMO.

Aoife O’Leary, chief executive of non-profit Opportunity Green and an observer at the IMO, said it was “very likely” that a levy would be introduced because of growing support from countries, companies and trade bodies. But she added: “The question now is what is the levy and what is it used for?”

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