A new report from climate NGO Opportunity Green reveals that the world’s largest shipping companies have amassed nearly $340 billion in profits since 2019 while paying strikingly low tax rates.
New figures, released on 25 March from climate change NGO Opportunity Green in its latest report “Global shipping: mega profits, micro taxes,” show the scale of the profits being made by leading shipping companies in the years since the pandemic. The world’s 139 largest shipping companies – accounting for 90% of the world’s fleet – made almost US$340bn in profits from 2019-2023. Of this sum, 93% was grabbed by the top 10 largest companies, the NGO claims.
This is a shameful set of statistics, and shipping companies must change course, start paying their fair share of taxes and get onboard with the true impact their operations are having on the planet
… commented James Meadway, Senior Director, Economics at Opportunity Green.
The report finds that the problem is biggest in the largest and most profitable companies, with nine of the top 10 from high income developed economies and four of those headquartered in wealthy OECD member states. Over 2019-2023, members of the OECD have an average tax rate on shipping companies of 4.3%, compared to a rest of the world average of 16.1%.
Despite these high earnings, the shipping industry remains exempt from the OECD’s global minimum corporate tax, allowing tax competition among countries to persist. This “race to the bottom” has been linked to increased greenhouse gas emissions, as countries lower tax rates to attract shipping investments, thereby enabling greater economic activity and emissions. The lack of taxation also serves as a barrier to decarbonizing the industry.
While higher taxes in shipping companies’ home countries could generate more national revenue, this approach would not change global revenue flows or directly address the industry’s environmental impact.
Instead, a global levy on shipping’s GHG emissions—soon to be discussed by the International Maritime Organization in MEPC 83—could ensure a fairer distribution of revenue while supporting climate mitigation efforts.
The shipping industry currently produces 1 billion tonnes of GHG emissions each year, and yet it continues to dodge paying fair taxes. It now has the unique chance to put that right by becoming the first industry to introduce a global levy and raise revenues that could be directed to deal with the worst effects of climate change in climate vulnerable countries.
… said Aoife O’Leary, CEO and Founder of Opportunity Green.
