The UN’s $13 Billion Shipping “Levy”: A Global Fee That Could Redefine Power
How a $13 Billion Shipping Fee Could Redefine Global Trade — and Quietly Reshape the Economics of Food, Energy, and Sovereignty.
A global first: the IMO’s Net-Zero “Levy”
This week in London, delegates from more than 170 nations are meeting under the International Maritime Organization (IMO) — a specialized agency of the United Nations — to decide whether to formally adopt the world’s first global emissions-pricing mechanism for an entire industry.
It’s called the Net-Zero Framework (NZF), and at its heart is what the IMO calls a levy — not a tax — on greenhouse-gas emissions from ships.
In its first phase, the levy would cost $100 per metric ton of CO₂ equivalent, rising to roughly $380 per ton by 2030. Those payments would apply to vessels over 5,000 gross tons, which together account for about 85 percent of global shipping emissions.
If enacted, the plan could raise $11 – 13 billion a year from ship operators. Those funds would flow into a new IMO-administered “Net-Zero Fund.”
Levy vs Tax: A technical distinction with political weight
In theory, a tax is a charge imposed by a sovereign government to fund its general budget.
A levy, by contrast, is usually earmarked — a sector-specific fee whose revenues are reserved for a defined purpose.
On paper, the IMO’s mechanism is a levy: the funds are tied to the maritime sector, not to the UN’s central treasury.
In practice, however, it walks and talks like a tax. It’s mandatory. It’s global. And it’s ultimately paid by consumers through higher shipping and import costs.
Who runs it — and what the money funds
The IMO, headquartered in London, is one of the UN’s 15 specialized agencies. It sets global standards for ship safety, pollution control, and now, climate compliance.
Under the draft framework, the IMO’s Net-Zero Fund would collect the levy and use the revenue to:
Reward low-emission ships that outperform regulatory benchmarks.
Support innovation and infrastructure, including new fuel bunkering for hydrogen, ammonia, and synthetic e-fuels.
Finance training and capacity-building in developing nations.
Facilitate a “just transition” for countries and sectors economically dependent on conventional shipping fuels.
In short, the fund would disburse money as incentives — effectively steering the market by deciding which technologies, ports, and nations receive billions in annual support.
The economic chain: who pays, who benefits
The IMO insists that the scheme keeps revenues “within the sector.” Yet shipping is the backbone of global trade — every manufactured good, commodity, or food product that crosses an ocean depends on it.
When carriers pay a $100–$380 per-ton emissions fee, that cost doesn’t vanish. It becomes part of freight rates, which flow downstream to importers and retailers, and finally to consumers in every country, including those that had no say in the policy.
That means the levy functions as a de facto global carbon tax on goods, not just on ships — a cost borne by citizens worldwide, regardless of whether their governments supported the measure.
Governance and representation
Supporters argue that the IMO’s 170 member states represent the world community, making the levy legitimate.
Critics counter that many of those governments are not democratically elected, and that ordinary citizens have no direct representation in how this new multibillion-dollar pool will be spent.
Unlike a national tax, which is debated and overseen through a domestic legislature, the IMO’s decisions are made by diplomatic delegates. The result: global rule-making with minimal public accountability.
More than a climate tool — a new form of power
The IMO’s Net-Zero Fund would make the organization a financial actor, not just a regulator. With $11 – 13 billion a year to allocate, it gains leverage to influence which technologies and companies succeed. The line between policy and financebegins to blur.
That shift also raises a larger question:
Could this model — a UN-affiliated agency collecting and redistributing billions annually — become a template for future global revenue systems?
For decades, UN programs have relied on member-state dues and voluntary donations. This would mark the first large-scale, recurring income stream tied to global regulation. Even if the funds are earmarked, it creates a monetary feedback loop: the UN system funds itself by pricing global activity.
Connecting the dots: the UN Tax Convention
Meanwhile, in a separate track, the UN Tax Convention is being negotiated in New York and Nairobi. That process, while not imposing taxes itself, aims to create a global framework for “tax cooperation” — harmonizing how nations design, collect, and exchange tax information.
The United States and several allies have opted out, warning that it could become a back-door mechanism for centralizing fiscal policy. Supporters say it simply modernizes cross-border tax standards.
Yet the pattern is clear: a growing UN interest in fiscal coordination, from the maritime levy to tax cooperation.
Together, these moves give international institutions more influence over how money flows across borders — and, by extension, how national policies evolve.
A quiet step toward fiscal centralization?
To be clear: the IMO levy does not funnel money into the UN’s core budget, nor does the Tax Convention create a “UN tax.”
But both efforts expand the UN system’s financial footprint and its ability to shape global economic behavior.
Taxation, in every society, is the foundation of authority. It is what binds citizens to a state and gives a currency its legitimacy.
If global agencies can levy fees, redistribute billions, and set fiscal norms — even through member-state proxies — they begin to function, at least partially, as transnational governing bodies.
Why you should care…
Whether one views this as progress or overreach, the implications are real.
The IMO levy may accelerate the decarbonization of shipping — a goal few oppose — but it also tests the boundaries of sovereignty, consent, and accountability in a globalized world.
A system that collects billions through mandatory fees, decides who gets rewarded, and passes costs to consumers worldwide deserves scrutiny.
Even if it isn’t called a tax, it behaves like one — and it may signal the first step toward a new era of global economic governance.
What It Means for Agriculture and Food Prices
Agriculture is a shipping-heavy industry. Well over 80% of global trade in grains and oilseeds moves by sea; for many farm and food products, maritime transport costs average ~10% of the import value (but can range from 2% to 40%+depending on commodity and route). When ocean costs jump, trade volumes and retail prices react.
Pass-through from the levy. The IMO scheme prices excess emissions at $100/tCO₂e in the early phase and up to ~$380/tCO₂e for higher, “remedial” non-compliance—costs ship operators will roll into freight rates. Higher freight rates filter down the chain (importers → wholesalers → retailers), showing up as slightly higher shelf prices for imported food, especially heavy or low-margin staples (grains, oils, sugar) that are more sensitive to transport costs. Empirically, when shipping costs rise, ag trade falls and local prices feel it—hence the concern among net-food-importing countries.
Fuel choices and the “food vs. fuel” wrinkle. Because the framework rewards lower life-cycle GHG fuels, it could spur use of crop-based biofuels in shipping unless rules steer toward truly scalable e-fuels (ammonia, methanol, hydrogen). Analysts warn that vegetable-oil-derived fuels could grow if not checked—tightening edible-oil markets that already influence food prices. Even the AP flagged concerns that over-reliance on biofuels could collide with food production. Policymakers pushing the levy argue the fund should prioritize non-food, scalable fuels to avoid distortion.
Will farm products themselves face carbon charges? Not under the IMO plan (it targets ships, not crops). But product-level carbon pricing is already emerging elsewhere. The EU’s Carbon Border Adjustment Mechanism (CBAM)—now phasing in—covers fertilizers (plus cement, steel, aluminum, hydrogen, electricity). Fertilizer sits upstream of farm production, so embedded-carbon costs can feed back into input prices for growers exporting to the EU. Other jurisdictions (including the U.S.) are studying border carbon adjustments that could widen to more sectors over time. Today, most schemes do not directly price farmed food as such—but they do price key inputs and energy, and future expansions are openly debated.
How big could the price effect be? It varies by commodity, route, and supply-chain structure. OECD work finds freight can be a double-digit share of landed agricultural value, with spikes causing meaningful changes in import prices and volumes. For containerized foods with higher margins, pass-through to retail may be muted; for bulk staples (grains/oils/sugar) and long routes, it’s stronger. Expect small but noticeable effects on average baskets—larger in island states and remote markets. Complementary investments the IMO fund claims it will support (port efficiency, cleaner bunkering, developing-country capacity) could offset some of the pressure over time—but design and governance will decide how much.
It does not bode well for the farm-to-fork chain:
Near term: The levy raises ocean freight costs at the margin; food importers will pass some of that on. Effects concentrate in bulk staples and long-haul trades.
Medium term: If the fund steers money toward scalable e-fuels and port efficiency, it can bend costs back down; if it leans on crop-based biofuels, it risks tightening edible-oil markets and amplifying food price volatility.
Policy horizon: Product-level carbon charges are not in the IMO plan, but border carbon tools (like the EU’s CBAM covering fertilizers) already touch agriculture indirectly. Future expansions by big markets could extend carbon pricing deeper into the ag supply chain.
If the U.S. opts out or drags its feet while major markets adopt the IMO levy, U.S. farm exporters can get squeezed. Here’s how that plays out in practice, plus a few realistic counter-moves.
What happens if the U.S. “doesn’t follow”?
1) Port-state rules bite anyway
Even if Washington resists, ships calling at foreign ports must meet those ports’ rules. Under international practice, Port State Control (PSC) inspectors can enforce IMO-derived requirements on any foreign ship that enters their harbors. So if the EU, UK, or others implement the IMO Net-Zero Framework (NZF) in their port entry conditions, the costs apply on those routes regardless of the U.S. position.
The draft IMO NZF prices “remedial units” at $100/tCO₂e (Tier 1) and $380/tCO₂e (Tier 2) through 2030; operators above the limit buy units or pay a penalty. Those are ship-level costs that will be passed into freight rates.
2) Europe already prices shipping, even for non-EU ships
Separately from the IMO, the EU ETS for maritime has been in force since 2024, covering 100% of emissions on intra-EU voyages and 50% on voyages into/out of the EU—no matter the ship’s flag. Fuel EU Maritime adds a fuel-intensity requirement for ships ≥5,000 GT calling at EU ports. So any U.S. grain, meat, feed, or fertilizer cargoes delivered to Europe already face carbon-cost elements baked into the ocean leg.
3) The levy becomes the “going rate” on competitive lanes
If the IMO NZF is adopted by an EU-led coalition—and applied through port access—the market price of moving bulk ag cargo on those lanes reflects the levy, even if U.S. law doesn’t. U.S. exporters compete with Brazil, Argentina, Ukraine, Australia, etc., on CIF (cost, insurance, freight) delivered prices. If freight goes up, delivered U.S. prices riseunless someone (shipper, trader, buyer) absorbs the hit. Reuters’ latest preview estimates $11–12B/yr in NZF revenues in the early years, signaling a material system-wide price signal.
4) Knock-on effects beyond the ship
If EU/UK (or others) also maintain border carbon measures (e.g., EU CBAM for fertilizer inputs), U.S. ag faces stacked carbon costs: on the ship and in certain upstream inputs. Even if the U.S. abstains, export-destination policiesstill shape U.S. competitiveness.
Does this disadvantage U.S. farmers?
On EU-bound and other compliant routes, yes—at the margin. The levy lifts ocean freight. Bulk staples (grains, oilseeds, meals, sugar) are highly freight-sensitive, so a higher voyage cost can tilt tenders toward exporters that are (a) geographically closer, (b) served by newer, lower-intensity fleets that earn “surplus units,” or (c) able to secure discounted green freight. Over time, operators that decarbonize faster capture more of the reward side of the fund, further improving their voyage economics relative to laggards. (That is the intended market-steering effect.)
“Unfair trade situation”?
It’s not a classic tariff discrimination against U.S. goods; it’s a route/port condition that applies to all ships serving those markets. But if the U.S. declines to align standards or offer transitional support, U.S. exporters can be relatively worse off than peers whose governments help their fleets and ports adapt (fuel availability, bunkering, credits, grants). That looks and feels “unfair” from the farmgate, even if legally it’s framed as environmental regulation of shipping, not a product tariff.
Real-world scenarios for U.S. agriculture
EU-bound soy/corn/wheat: Freight cost uplifts from ETS + (later) IMO NZF are priced into offers. U.S. Gulf vs. Black Sea competitiveness could swing on a few dollars per ton. Efficient ships or green corridors win tenders more often.
Asia lanes (Japan/China): If those ports implement or recognize IMO NZF compliance, the same logic applies. If some Asian ports delay, traders may optimize routings or shift transshipment hubs to manage compliance costs.
Domestic U.S. coastal trade: Largely insulated only if voyages are purely domestic (e.g., Jones Act), but any leg touching foreign ports re-enters the compliance world. (And the U.S. already enforces MARPOL Annex VI standards domestically.)
Mitigation levers the U.S. (and farm sector) could use
Green-freight procurement: Co-ops/exporters lock in contracts with higher-performing vessels to minimize remedial-unit exposure (or even capture “surplus unit” benefits in pricing).
Port & fuel infrastructure: Accelerate alternative-fuel bunkering at U.S. ag export gateways (Gulf, PNW) so carriers can comply at lower cost on U.S. legs. That directly helps farmgate competitiveness.
Targeted credits or rebates: Temporary, WTO-consistent support for exporters facing new, foreign-imposed shipping compliance costs (similar to how some governments offset ETS pass-throughs in power-intensive sectors).
Standards alignment without ceding control: The U.S. can remain skeptical of UN governance yet recognize that port-state measures abroad set de facto conditions. Pragmatic alignment on measurement/verification could cut transaction costs for U.S. shippers while preserving policy independence.
At the end of the day…
The IMO levy is charged to ships, but consumers and exporters ultimately feel it.
If the U.S. stands aside while key destinations implement it, U.S. farm exports face a relative headwind on affected routes.
Because port states can enforce standards on visiting ships, opting out doesn’t shield U.S. cargo once it sails to compliant markets. The smart play is to lower compliance costs for U.S. routes and secure green-freight optionsso American farmers aren’t priced out on the ocean leg.