The push for a global levy on international shipping emissions won additional support from another dozen countries during talks in London this week, but it is still opposed by a group of large emerging economies including Brazil, China and Saudi Arabia. The negotiations made little concrete progress, leaving much work ahead of a crunch meeting in April, according to observers.
More than 60 countries – including European Union member states, the UK, Japan, Nigeria and Kenya – have now swung behind the proposal, championed by Pacific island nations, to tax pollution from ships to reduce the sector’s planet-warning emissions and generate revenue for climate action. New backers include Malawi, Mexico, Namibia, New Zealand, Senegal, Switzerland and Türkiye.
But a group of 12 countries such as Brazil, China, Indonesia, Saudi Arabia and South Africa argue that a levy would hit developing nations the hardest and risk exacerbating food insecurity by increasing the cost of maritime trade.
Christiaan De Beukelaer, a senior lecturer at the University of Melbourne, noted that countries accounting for at least two-thirds of fossil fuel subsidies continue to stand in the way of a shipping levy.
“This includes Brazil, who is touting to be a leader in hosting this year’s [COP30] climate summit, yet just joined OPEC+, a group of major oil-exporting nations. These fossil fuel incumbents should not be allowed to block urgent climate action in the shipping industry,” he said.
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Slow progress
A week of talks ended at the International Maritime Organisation (IMO) in London on Friday with little concrete progress on if and how a levy should be adopted, while all options to accelerate emissions cuts by incentivising energy efficiency and deploying cleaner fuels and energy sources such as wind power still on the table.
“English porridge and Caribbean coffee during the week-long IMO negotiation was good, but we are running out of time to get our act together,” Faig Abbasov, shipping director at NGO Transport & Environment, told Climate Home News. “The dirty ship hasn’t moved an inch yet.”
Experts at the UCL Energy Institute, however, gave a more favourable view, reporting that the talks saw further “tidying up” of options and draft language for a potential agreement, and expressing the view that the process is on track to make key decisions in April.
Annika Frosch, research fellow at the institute, noted that support for a levy continues to grow, now grouping two-thirds of signatories to a key maritime treaty to prevent pollution from ships in “a diverse coalition” with key vessel flag states, including African nations, Small Island Developing States (SIDS), and Least Developed Countries (LDCs).
Plan for emissions controls by 2027
International shipping accounts for around 3% of global emissions. Countries have already agreed to cut shipping emissions by at least 20% from 2008 levels by 2030, at least 70% by 2040 and to reach net zero emissions around 2050.
Ambassador Albon Ishoda, the Marshall Islands’ special envoy for maritime decarbonisation, said that without a universal levy, the IMO’s climate targets would be meaningless. “This is the fastest, most effective, and lowest-cost way to ensure a just and equitable transition, where no one is left behind. Delays cost lives. The time for action is now,” he added.
The IMO wants to have carbon-cutting measures in place by 2027 – a timeline that would require countries to adopt new rules at key talks in October. The negotiations are set to resume in April, when an agreement is needed for countries to meet the October deadline.
The levy under discussion would force ship owners to pay for every tonne of greenhouse gases their vessels emit, making the use of more polluting fuels – like today’s oil-based bunker fuel – more expensive. Proponents argue this would incentivise the sector’s energy transition and provide the funding needed to ensure it is equitable and keeps costs as low as possible.
But in a submission to the IMO before this week’s talks, the group of opposing countries said “a levy would not deliver a just and equitable transition” and its adoption “may trigger negative, economy-wide impacts”. They argue the tax could reduce exports from developing countries, increase economic inequalities and impact food prices in low-income countries.
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Despite this warning, some of the world’s poorest and most climate-vulnerable countries, such as Liberia, for example, have joined the supporters of an emissions levy.
Delaine McCullough, the Ocean Conservancy’s shipping emissions policy manager and president of the Clean Shipping Coalition, described the new voices calling for the levy at the IMO this week as “one of the bright spots”.
“It was particularly encouraging to see Mexico and Panama act as regional leaders in this crucial discussion – we now need a rallying call by IMO member states to agree on strong global fuel standard and greenhouse gas levy as the best way forward for reducing emissions from the shipping sector,” she added in a statement.
Views differ on levy structure and use
The levy’s proponents are not yet all on the same page – there are still differing views on how much the levy should be and what the proceeds should be spent on. Analysts say these key points could be divisive if the principle of a levy is agreed at the talks.
Advocates of the levy have suggested a wide range of prices – from $18 to $150 per tonne of carbon dioxide emitted – with Pacific island nations backing the highest rate.
Equally, there are disagreements over whether the revenue should be used solely to accelerate the shipping sector’s transition to clean energy sources or to support climate action more broadly. Priority for low-income and climate-vulnerable countries is also up for discussion.
The UCL Energy Institute said, however, that there is broad support for a fund to help achieve a just transition and cushion the impacts of a global shift to greener shipping.
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In an attempt to bridge the broader divides, Singapore has suggested expanding proposals for a fuel standard so that ship owners would pay for emissions above a certain level. Under this proposal, ship owners would be required to keep emissions below two thresholds and incur lower penalties if they breach the most ambitious one. But it is unclear if the idea will win countries’ support.
Also notably absent from the talks has been any discussion on what should be permitted as a clean fuel – another highly contentious issue. “We should be especially vigilant as to how much space will be given to biofuels so that the cure isn’t worse than the disease,” said Abbasov of Transport & Environment.
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Global tax on shipping emissions faces choppy waters despite growing support
June Rubis is a steering group committee member for the Cali Fund, from Sarawak in Malaysian Borneo.
At COP16 in Cali, governments made a significant commitment: at least half of the funding from the new Cali Fund should support the self-identified needs of Indigenous Peoples and local communities, including women and youth. It was a watershed moment for multilateral benefit-sharing.
The challenge now is to translate that commitment into access arrangements that recognise the different institutions, priorities and decision-making processes of Indigenous Peoples and local communities.
For generations, biodiversity and traditional Indigenous knowledge have provided significant value to companies who depend on nature’s genetic diversity to discover new drugs that fight diseases, create products that improve health, and grow crops resilient to extreme heat and flooding events. While some compounds are sampled directly from the source country, increasingly the digital blueprints are held in online public databases which are freely accessible to use for innovation and research.
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The Cali Fund was established at COP16 to encourage commercial users of Digital Sequence Information, or DSI, to share benefits arising from its use. Estimates suggest it could generate over $3.5 billion a year – a stark contrast to the modest $10,656 currently committed to the fund from just five SMEs, underlining how much progress must be made at COP17 over the next two weeks.
The COP16 decision that set up the fund offers two routes for money to reach Indigenous Peoples and local communities: through government authorities, and through direct payments to institutions identified by Indigenous Peoples and local communities themselves.
Varied ways of organising
Indigenous Peoples and local communities organise through a wide range of institutions. Some have national or regional organisations experienced in managing international grants. Others work through territorial organisations, customary institutions, community associations, cooperatives or networks. Some have professional finance teams and audited accounts; others have extensive experience governing territories, collective resources or conservation work without having been organised around international funding requirements.
For direct access, some questions are already apparent. Which institutions should be able to receive funds? How should they be identified? What fiduciary standards should apply? How should safeguards and accountability work where institutional capacities differ? What support may be needed where institutions have strong community mandates but less experience with international finance?
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If access is designed mainly around institutions that already meet the expectations of large international finance mechanisms, early funding will tend to favour those already familiar to funders. They will gain further experience and become better positioned for future funding, while institutions with less administrative capacity may remain outside the system despite strong community mandates and long histories of stewardship.
These first decisions matter most, because they set the terms for everyone who follows.
The role of intermediaries requires care. Some Indigenous organisations may want a fiscal host to hold and manage funds on their behalf. Communities may choose to work through an NGO they trust. Government-facilitated arrangements may work well in particular national contexts.
What matters is the function an intermediary performs and the authority that comes with it. Providing administrative support is different from deciding which Indigenous organisations qualify, which priorities can receive support, or how success will be assessed. Direct access means communities keep that decision-making authority.
Decision-making power
The COP16 decision refers to institutions that Indigenous Peoples and local communities identify. But authority among Indigenous Peoples does not sit in one kind of body. It may sit with territorial organisations, customary institutions, community associations or combinations of these. Legal recognition and customary authority do not always align neatly.
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An important feature of the Cali Fund’s governance is that Indigenous Peoples and local communities participate as full members of the Steering Committee, rather than as observers. Seven Indigenous Peoples and local community representatives, one from each of the seven socio-cultural regions, participate in consensus-based decision-making alongside representatives of governments and UN entities. Six additional representatives from civil society, scientific institutions and the private sector participate as observers.
That representation carries responsibility. Institutional legitimacy, access and representation take different forms across the seven socio-cultural regions. Indigenous Peoples and local communities members therefore have an important role in bringing those differences into the Fund’s governance and in ensuring that arrangements developed for one context do not become the assumed model for everyone else.
Safeguards and clear responsibilities
COP17 can establish the core principles and direction, while allowing operational pathways to develop in ways that respond to different regional contexts. The decisions countries take in Yerevan will shape how that flexibility is realised in practice.
The choices made around access will influence which institutions are able to participate, which routes become established and which forms of authority are recognised within the funding architecture. The aim should be an architecture with enough structure to maintain confidence while allowing for different forms of Indigenous and community governance.
A credible direct-access pathway will need safeguards, financial oversight and clear responsibilities. This would give the 50% commitment a stronger institutional foundation.
The Cali Fund’s importance will ultimately depend not only on how much funding reaches Indigenous Peoples and local communities, but on whether they are able to determine how the money is accessed, governed and used. This requires access pathways that recognise their institutions, priorities and decision-making processes, rather than requiring them to conform to a single predetermined model.
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COP17 must settle who decides how Cali Fund money is disbursed
The UK government has approved extraction at the Jackdaw gas field in the North Sea, despite acknowledging that this decision could make it harder for Britain to convince other countries to move away from fossil fuel production.
UK energy secretary Miatta Fahnbulleh approved the drilling on Wednesday after months of high-profile debate, fuelled in part by interventions from US President Donald Trump. She argued that the project would boost energy security in the wake of the Middle East fossil fuel crisis, protect hundreds of jobs and add £2.9 billion ($3.88bn) to the UK economy.
She said Jackdaw’s gas would be cleaner than imported gas and would not prevent the UK from meeting its legally-binding carbon targets and its goal of net zero by 2050. As the field is already licensed, she said extraction was consistent with the Labour Party’s 2024 manifesto promise not to issue any new oil and gas licenses.
The same morning, the government announced a new Energy Wealth Fund to reinvest oil and gas revenues in the climate transition. It will start with £2 billion ($2.67bn) from the government and be topped up over time with tax revenues from offshore oil and gas production.
Climate campaigners in the UK and abroad were quick to condemn the decision, while a leading legal expert told Climate Home News it goes against the advice of the International Court of Justice. Meanwhile, the government’s own documents reveal that it recognises the drilling could damage the UK’s reputation and its ability to push forward the global transition away from fossil fuels.
“Climate leadership” blow
The 92-page decision document says Fahnbulleh “acknowledges that international standing on climate is important and accepts that a decision to grant consent may not further the UK’s international climate leadership.”
It adds: “She acknowledges concerns about the potential implications for the UK’s credibility and influence – including the difficulty inherent in encouraging other states to move away from fossil fuel production while the UK continues, in a limited and transitional way, to draw on its own domestic resources.”
While noting that Jackdaw has not been issued with a new license – just permission to extract gas – the document says Fahnbulleh “accepts this does not fully resolve the underlying tension in the UK’s position” but “considers this alongside the substance of the UK’s wider record [on emissions reduction], which remains significant”.
It continues that she accepts these concerns are “legitimate” and weigh against approving gas extraction, but only gives this argument a “moderate negative weight” set against the benefits of gas production.
“Huge” wrong signal
In international climate talks, the UK has long supported the transition away from fossil fuels and is one of very few major oil and gas producers to ban new licenses. Across the North Sea, the Norwegian government continues to make offshore areas available for oil and gas exploration through annual licensing rounds.
Climate experts and campaigners shared the concern, acknowledged in the decision document, that approving Jackdaw could set a precedent for fossil fuel production elsewhere. Sam Fankhauser, professor of climate change economics at Oxford University, said the direct climate impact of Jackdaw is “much smaller than the debate around it would suggest” but the “wrong signal it sends, however, is huge”.
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Bob Ward, policy and communications director at the Grantham Research Institute on Climate Change, said that while Jackdaw’s output will be very small, “it will signal to other fossil fuel producers that they too should carry on with business as usual, less than a month before the COP31”.
Kenyan campaigner Mohamed Adow, director of Power Shift Africa, called the decision “a serious blow to Britain’s international climate credibility” as “the UK cannot expect developing countries to move away from fossil fuels while giving the green light to new drilling in its own backyard”.
International Court of Justice
In July 2025, the International Court of Justice (ICJ) advised that government failure to take appropriate climate action “including through fossil fuel production” may amount to an internationally wrongful act.
The UK voted in favour of a United Nations resolution welcoming the advisory opinion. Yet, in its Jackdaw decision document, it notes that the ICJ opinion is not legally binding and says the UK does not accept the court’s opinion that the customary international law duty to prevent significant harm to the environment applies to climate change.
Fahnbulleh concludes that, although it will have “significant effect on the environment”, gas drilling in Jackdaw “would not lead to significant harm to the environment” – and so does not breach any duty to prevent such harm. Instead, the government document says the duty should be considered “as a matter of policy rather than legal obligation”.
Margaretha Wewerinke-Singh, who led Vanuatu’s legal team pushing for the ICJ’s advisory opinion, told Climate Home News that treating the duty as a matter of policy rather than legal obligation is “not how international law works”. “An advisory opinion is not a judgement,” she said, “but it states the law as it stands, and that law binds the UK whether or not it accepts it.”
“Even as a matter of policy,” she added, “the decision asks the wrong question: whether Jackdaw on its own would cause significant harm. The Court found that accumulated emissions are already causing significant harm. What matters is whether approving new production is consistent with the stringent due diligence the duty requires.”
Public support for decision
While the decision was criticised by climate campaigners and the opposition Green party, polling reported by Politico suggests that 55% of British adults support drilling at Jackdaw, with just 14% opposed. Even supporters of the UK’s net zero target back new drilling by more than two to one, the polling found.
Jackdaw is one of two North Sea oil and gas fields the government has been debating whether to extract more from for months. While Jackdaw is a small gas field, the other, Rosebank, is a much larger field that holds mostly oil.
Rosebank’s emissions are estimated to be around seven times higher than Jackdaw’s. Fahnbulleh told Sky News that Rosebank is “different” to Jackdaw because its oil would be exported, whereas Jackdaw’s gas will be used in the UK, adding that she will consider it “in its own right”.
The Guardian reported on Wednesday that UK officials say Fahnbulleh is minded to refuse approval for Rosebank. She has not yet taken a final decision on Rosebank, the newspaper said, but a ruling is expected later this year.
The post UK approves gas drilling despite admitting blow to “climate leadership” status appeared first on Climate Home News.
UK approves gas drilling despite admitting blow to “climate leadership” status
A surge in wholesale costs driven by expensive gas is responsible for nearly 90% of the rise in UK household electricity bills since 2020, reveals new analysis.
The figures, shared with Carbon Brief by thinktank Nesta, show that wholesale gas costs are also behind the vast majority (77%) of the increase in household gas bills.
The analysis firmly contradicts the idea, which has become embedded in UK media and political narratives, that the UK’s net-zero target is to blame for high energy bills.
Andrew Sissons, director for sustainable future at Nesta, tells Carbon Brief that net-zero is, in fact, “helping to shelter Britain from the impact of expensive gas”. He adds:
“Rising gas prices, not net-zero, have driven most of the recent surge in Britain’s energy bills. Britain is particularly exposed, with over 80% of households connected to gas mains, while our electricity system still relies too much on gas as the marginal unit.”
The analysis comes after the UK government gave its approval for the Jackdaw gas field to be developed in the North Sea, despite stating that it “would not…affect prices”.
Another gas crisis
In January 2026, Carbon Brief reported that two-thirds of the rise in electricity bills since before the 2022 global energy crisis was due to high gas prices.
Now, amid ongoing conflict in the Middle East, wholesale gas prices are at their highest levels since Russia’s 2022 invasion of Ukraine.
Indeed, as of 19 October, UK wholesale gas prices stood at 220p per therm (£75 per megawatt hour, MWh), above the average for 2022 of 210p/therm (£72/MWh).
The figure below shows that, after accounting for inflation, typical UK annual household electricity bills had risen £180 by the fourth quarter of 2026, relative to the same period in 2020.
Some 90% of this increase (£161) is due to wholesale costs, driven by the price of gas.