October 14-17, the International Maritime Organization (IMO) will hold a special session of the Marine Environment Protection Committee (MEPC), which will include a vote on the draft amendments to the net-zero framework to decide whether it passes.
On October 10, U.S. Secretary of State Rubio, Energy Secretary Wright, and Transportation Secretary Duffy issued a joint statement stating that measures such as blocking ships from certain countries from entering U.S. ports, visa restrictions, commercial penalties, port fee levies, and sanctions against relevant officials will be taken to protect the United States from the impact of the IMO net-zero framework, the UN’s first global carbon tax.
On October 12, the European Commission’s Directorate-General for Mobility and Transport issued a statement saying that the EU views the net-zero framework as an important milestone and calls on the IMO to adopt the framework next week.
The tit-for-tat statements indicate intense gaming between the opposing and supporting forces of the net-zero framework. Relevant sources revealed that the net-zero framework requires a two-thirds majority vote from the parties to the IMO’s International Convention for the Prevention of Pollution from Ships (MARPOL) to pass. Previously, abstentions were generally not counted in principle, only “for” or “against” votes were considered. However, the U.S. is currently lobbying to count abstentions in the “denominator.” Objectively speaking, besides oil-producing countries that have already clearly expressed opposition to the net-zero framework, there are also many countries with little direct interest in the draft that might abstain or vote against “to do the U.S. a favor.” These factors add uncertainty to the passage of the net-zero framework.
However, the forces in favor of the net-zero framework should not be underestimated. IMO Secretary-General Arsenio Dominguez has repeatedly stated that he believes the agreement will be adopted. He said: “I make this statement based on the organization’s past record, the cooperation among us, and our understanding that we still face some challenges and some issues that need special resolution.”
U.S. Opposition, Even Playing the Sanctions Card
The joint statement released by the U.S. recently stated that it is considering the following actions against countries supporting the global carbon tax on U.S. consumers: conduct investigations and consider formulating potential regulations to combat anti-competitive behavior by certain flag states, and potentially block ships registered in those countries from entering U.S. ports; implement visa restrictions, including increased fees and processing procedures, mandatory re-interview requirements, /or modifications to D seafarer visa quotas; impose commercial penalties on ships, LNG projects, or infrastructure contracts from countries supporting the framework; levy additional port fees on ships owned, operated, or flying the flag of countries supporting the framework; consider imposing sanctions on officials supporting radical climate policies. The U.S. will take action and implement sanctions against countries that support the export of this European-led neo-colonialist global climate regulation.
As early as April this year, before the IMO MEPC’s 83rd session approved the net-zero framework, the U.S. openly expressed opposition and withdrew from the negotiations. The U.S. called the draft a “blatantly unfair measure” and threatened retaliation against countries supporting the agreement, also stating it would take countermeasures to offset potential fees levied on U.S. vessels.
Ultimately, the net-zero framework was approved at MEPC 83, with 63 countries voting in favor, 16 against, and 24 abstaining.
In September, a U.S. State Department spokesperson stated that the U.S. “is actively exploring and preparing remedial measures, including tariffs, visa restrictions, /or port levies.” The spokesperson said the department would engage with “our partners and allies” and recommend they take similar measures.
According to Reuters, a spokesperson for the Dutch Ministry of Infrastructure and Water Management stated that the Dutch government received an oral warning from U.S. government representatives, indicating that the Netherlands could face tariffs or other retaliatory measures if it supported the adoption of the framework.
Industry insiders revealed that the U.S. has been working in recent months to try to change the vote calculation method and persuade its allies to at least abstain. Originally, IMO’s practice was not to count abstentions, but this time the U.S. strategy is to persuade relevant countries to abstain and then demand that IMO calculate based on two-thirds of all valid votes, i.e., including abstentions in the “denominator.” This calculation significantly increases the probability that the draft net-zero framework amendments will not pass, because some countries with “little at stake” might abstain or vote against to appease the U.S.
Not Just the U.S., “Opposing Voices” are Varied
As the vote approaches, more shipping companies and institutions have expressed opposition or called for modifications to the net-zero framework.
According to Reuters, on September 18, led by Frontline (owned by Norwegian tycoon John Fredriksen), Greece’s TMS Group (of George Economou), Capital Maritime (of Marinakis), the Angelicoussis Group, and Saudi Arabia’s Bahri, a group of shipowners holding significant influence in the global tanker and bulk carrier transport market publicly issued a joint statement warning the IMO: if unmodified, this scheme would impose an excessive burden on the industry and consumers. Subsequently, Greece’s Dynacom, Dynagas, Centrofin, GasLog, as well as Korea’s HMM, Canada’s Seapeak and Stolt Tankers, among others, have joined in. These shipowners collectively control over 1,200 vessels, with a capacity of 150 million deadweight tons. In their open letter, they pointed out that the current framework lacks incentive mechanisms, neither guaranteeing the implementation of emission reduction targets nor providing a level playing field for the industry’s transition. These shipowners stated: “As it stands, we do not believe the IMO’s net-zero framework can effectively support the decarbonization of the shipping industry, nor ensure its intended level playing field.” They called for “critical amendments” before the framework is adopted.
Greek Minister of Maritime Affairs and Insular Policy, Vasilis Kikilias, echoed these concerns at the London International Shipping Week held in late September, stating that amendments are crucial.
The American Bureau of Shipping (ABS), among classification societies, called on the IMO to “press the pause button,” suggesting that progress should be made only after ensuring clear transition pathways and transparent fund governance.
Oil companies strongly criticized the new regulations, calling them “unfair, ineffective, lacking certainty,” and insufficient for countries to adopt.
Oil-producing countries such as Bahrain, Iran, Iraq, Kuwait, Saudi Arabia, the UAE, Venezuela, and Yemen “as expected” called for delaying the adoption of the IMO net-zero framework – these were the same countries that voted against the draft net-zero framework amendments in April. Saudi Arabia questioned the cost and legal basis of the framework, stating that a shipping carbon tax would drive up food and commodity prices, with developing countries bearing the brunt, and it would not truly facilitate ship fuel transition. Additionally, the authority for the net-zero fund’s fundraising, expenditure, and penalties for non-compliance exceeds the legal scope of MARPOL.
Furthermore, environmental organizations also voiced “opposition,” but for completely different reasons: the tiered carbon pricing mechanism in the existing framework raises far from enough funds to drive the green fuel transition, let alone compensate poor countries, and needs to be increased further.
Industry insiders stated that behind the opposing voices are demands to protect self-interests. As the vote approaches, these voices will be numerous as they intensify public opinion efforts to influence the voting outcome.
Opposition Aside, the “Forces for Passage” Remain Strong
Amid the opposition, there are powerful forces firmly supporting the adoption of the net-zero emission framework.
On October 12, the European Commission’s Directorate-General for Mobility and Transport issued a statement supporting the adoption of ambitious global measures at the IMO level aimed at decarbonizing the shipping industry and ensuring a globally level playing field. The EU views the net-zero emission framework as an important milestone and calls on the IMO to adopt the framework next week. Once the bill is passed, the European Commission will review existing relevant EU carbon reduction regulations.
Additionally, just last week, the heads of seven major global shipping associations, including the Danish Shipping Association, the Japanese Shipowners’ Association, the Royal Association of Belgian Shipowners, the Royal Association of Netherlands Shipowners, the Singapore Shipping Association, the UK Chamber of Shipping, and the Norwegian Shipowners’ Association, jointly called on the IMO to adopt the “net-zero emission framework” at the upcoming MEPC special session. Their joint statement pointed out that due to its global nature, the shipping industry urgently needs a global regulation to address climate change. A global regulation is a necessary condition to achieve the strategic goals of the established GHG reduction strategy. It helps reduce emissions, creates a uniform and predictable framework environment for the shipping industry, and sends the strongest signal to investors and producers to scale up alternative fuel production to meet the needs of the shipping industry’s transition to zero emissions. The statement called on IMO member states to unite and vote in favor of global climate measures, warning that failure would seriously hinder the green transition and could lead the shipping industry into a complex and fragmented situation of regional climate regulations.
Previously, the “Zero Carbon Coalition,” composed of over 180 companies including the world’s most renowned shipowners, issued a statement calling for the adoption of the net-zero emission framework. They warned that failure to adopt the net-zero emission framework in October would lead to disparate self-determined measures in various regions, making the achievement of IMO’s net-zero targets impossible. Some senior shipping executives warned that the failure of the net-zero framework might please some shipowners secretly, but it would almost certainly lead the EU to expand the scope of its Emissions Trading System (ETS) and the EU’s FuelEU Maritime regulation, while other countries might use the “failure of the UN system” as a reason to introduce their own carbon taxes.
IMO Secretary-General Arsenio Dominguez firmly stated that the net-zero emission framework will be adopted in October. “I make this decision based on the organization’s past record, the cooperation among us, and our understanding that we still face some challenges and some issues that need special resolution.” During his first official visit to Panama, he stated that the economic measures agreed upon by the IMO to reduce shipping emissions are not a “tax,” but a global mechanism aimed at preventing countries or regions from introducing unilateral regulatory actions. “At the meeting in October, we will listen to all parties, respond to concerns, and advance the relevant measures in a way that helps achieve the goals.” “We need global measures so that maritime transport can continue to operate efficiently, thereby avoiding more negative and uneven implementation.” He stated that dialogue with the EU has formed a consensus: once global measures take effect, the EU will cancel its scheme.
Lloyd’s List analysis suggests that in the IMO voting system, shipowners are represented by industry organizations like the International Chamber of Shipping and BIMCO, but the real voting power lies with individual countries, especially large flag states. As major shipping nations, Greece and Cyprus voted in favor in April, and this time they are certain to align with the 27 EU member states; the latest statements from shipowners are unlikely to change the outcome. Small island states abstained in the April vote in protest, but are now calling for accelerated fund establishment; when it comes to the critical moment, they are likely to choose to vote in favor. The most likely approach is to patch up the existing mechanism rather than start over.
