2025 could be a milestone on climate finance, providing the much-needed and much-overdue funds for the world’s most climate vulnerable.

The unique opportunity to make this happen is rapidly approaching at the UN’s International Maritime Organization (IMO) as governments finalise negotiations on a global carbon price on the 1 billion tonnes of annual emissions from international shipping.

For the IMO, a carbon price, or a “levy”, is a tool to help achieve shipping’s historic commitment to an equitable transition to zero-emission by 2050 by bringing down the costs. Generating up to $60 billion in finance – that is separate and additional to the UNFCCC climate funds – the mechanism could have far-reaching benefits. It would be a lifeline for many climate vulnerable, low-income countries, many of which are in Africa, but especially for Small Island Developing States and Least Developed Countries (SIDS and LDCs), which face the worst pressure from our heating planet.

Being born in Angola, raised in Zimbabwe, Botswana, and South Africa, and now living in Fiji, I have witnessed first hand how devastating climate change impacts can be, from droughts and wildfires to  water and energy scarcity. These environmental disasters will only get worse if no ambitious and immediate action is taken by governments, putting even more strain on health, food security, and livelihoods.

The IMO promised to finalise its discussions on a carbon levy in April 2025 in order to put the mechanism into action in 2027. This effectively leaves around three months for its 176 member states, including 41 countries in Africa, to find consensus around the levy’s price, revenue distribution, and implementation. The last IMO discussions in March 2024 showed a strong presence of African voices in the room, and just this January, Kenya, Nigeria, and Liberia joined the pro-levy majority at the IMO. This is an important and welcome development. African governments must continue to take an active role as the IMO agrees on the design of the future policy

There are several proposals for levy mechanisms at the table, but, as shown by experts, not all live up to the full potential of a shipping carbon levy.

If invested strategically, the levy finance could have very positive effects in both the shipping sector as well as beyond. In shipping, it could help upgrade vessels, ports, and supply chains to zero-emission; improve resilience to more frequent and extreme climate disruptions; help cushion the impacts of this transition on trade, including the cost of particular goods like food and agricultural products. Beyond maritime, the revenue could be invested in supporting wider climate action, such as boosting renewable energy production, infrastructure, or green agriculture practices, and helping to achieve sustainable development goals.

To generate sufficient funds, coupled with the rapidly needed shipping emissions reductions, the levy has to be high enough. The world’s leading economists show that a $150-300 levy is the best way to deliver this energy transition at a low cost while generating revenues to promote economic equality.

Currently the only proposal at the IMO that is truly ambitious and fair is for a $150 levy with an equitable revenue distribution for in- and out-sector investments, put forward by Belize and Pacific Island states.

The EU’s proposal for a $100 levy, supported by Japan, is another strong contender. But while it nods to justice and equity, it lacks – in its current form – a clear revenue distribution framework that can adequately fund climate adaptation and mitigation in all vulnerable states. For Africa, where climate impacts extend beyond the maritime sector, this limitation could prove problematic. Landlocked developing countries, some of whom are not IMO members, will be affected by the shipping sector’s energy transition and need to be supported in the process. This will only be possible through “out-of-sector” spending of levy revenues that the EU proposal does not include.

Another important thing to consider is that while EU Emissions Trading System (ETS) revenues are in part collected from non-EU actors, they are invested in climate projects in Europe alone. In other words, the EU collects revenues from pricing global shipping emissions but does not share it with the world. The EU should do better at the international level, putting a fair transition for vulnerable countries at the core of its global proposal.

There is still a minority of countries at the IMO that resist a global shipping levy altogether. They favour a weak mechanism where shipping companies would be required to pay penalty fees, considered in this case as a “revenue”, for non-compliance with IMO regulations. This proposal would only raise between $0.5 billion and $11 billion a year. Many experts have warned that this pathway is insufficient, not-fit for purpose, and it would not achieve what countries promised to do under their 2023 climate commitment.

Countries, particularly those in the Global South, must seize this year’s unique opportunity at the IMO to hold a major global polluter accountable for its emissions and to do so in a way that benefits their citizens.

I call on African governments to consider further leveraging their collective voice at the upcoming round of discussions in London on 17-21 February and push for a strong levy that can unlock critically needed climate finance for sustainable and equitable solutions in maritime and beyond.

Failing to get this right risks leaving many vulnerable countries alone to bear the ever-growing costs of a climate crisis they did not cause and allowing one of the biggest polluters – a multi-billion dollar shipping sector – to get away with it.

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