We must stop subsidising fossil fuels and tax them: A shipping levy is the best way to get serious this year

A recent study published by the Fossil Fuel Non-Proliferation Treaty Initiative, of which most 6PAC+ countries are members, on the link between fossil fuel subsidies and obstruction to a maritime GHG Levy at the International Maritime Organization.

Successful climate action fundamentally depends on phasing out fossil fuels, because they are responsible for more than 85% of carbon dioxide (CO2) emissions. However, due to the political and economic power of fossil fuel producers and their lobbyists, oil, coal and gas have become so embedded in the economic systems and psyches of nations across the world that political support to phase them out remains scant. Worse, countries continue to explicitly and implicitly subsidise fossil fuels at a total of seven trillion dollars a year.

This subsidy amounts to $190 per tonne of fossil fuel-based CO2 emitted. While some countries tax carbon dioxide and other greenhouse gas emissions, all existing taxes remain well below this $190/tCO2 average subsidy. This must change. In 2025, the International Maritime Organization has the opportunity to adopt a universal “levy” on greenhouse gas emissions from international shipping. The Micronesian Center for Sustainable Transport (MCST) has supported work to deliver this, to ensure that the largely untaxed shipping industry will finally pay for its pollution and commence fossil fuel subsidy reform in earnest.

Over fifty countries, representing 66% of the global shipping fleet (by tonnage), support such a levy – including the three largest flag states, Liberia, Panama and the Marshall Islands. This is the closest the world has come to setting a legally binding global price on emissions that covers an entire industry, spearheaded by 6PAC+ and supported by MCST.

However, BRICS (Brazil, Russia, India and China) and Petro-States, (including OPEC, USA, Australia and Norway) account for 68% of fossil fuel subsidies and do not support a shipping levy. We welcome this research that illustrates fossil fuel incumbents are standing in the way of effective climate action. They must not be allowed to do so.

MCST looks forward to working with states and organisations committed to take decisive action to tackle climate change. This should start by urgently phasing out fossil fuels.

Read the full report here: De Beukelaer (2025) We Must Stop Susbisiding Fossil Fuels and Tax them Instead.