It has been clear for some time now that the Net Zero Framework (NZF) would be a measure that would lead to conflict. Over the last few months, the Trump administration has done its utmost to botch the NZF, the first framework ever to establish a carbon pricing system in the international shipping context with penalties and credits.
The United States’ tenacious opposition has found significant support not only in Singapore, Saudi Arabia, and the major oil-exporting countries, but also in Greece and Malta. Last Friday, at an IMO extraordinary session, they decided to go against the grain, abstaining from the vote and hence facilitating the majority decision (with 57 countries in favour and 49 against) to postpone everything until 2026, when the IMO’s Marine Environment Protection Committee (Mpec 84) will have to take up the dossier again.
This abstention by the two Mediterranean countries was seen by EU leaders as an act of mutiny, particularly since the Commission had already taken a joint stance on the issue in September, expressing its willingness to move forward with the adoption of the new regulatory package.
Some argue that the European Union is considering taking legal action against these two countries for failing to meet the commitments they had previously made in Brussels. However, what is most important to disclose is that there are still conflicting opinions on the measure, confirming the de facto stalemate in decarbonization policies.
As is well known, the NZF, proposed by the IMO in April, introduces a carbon credit trading system for ships with a gross tonnage of over 5,000 tonnes. The regulatory framework stipulates that these vessels, which are responsible for 85% of carbon dioxide emissions produced in the international maritime sector, are required to achieve annual targets for mitigating /or reducing the emissions they produce. They have to compensate for any excess emissions by purchasing CO2 credits from other ships or paying penalties that will go to the new Net-Zero Fund, the carbon pricing system’s central economic fund, which still doesn’t have any clear rules of governance.
The taxes on emissions in the shipping sector are a controversial issue that risks negatively impacting shipowners, emerging countries, and global logistics chains. The United States has been attacking it right from the beginning. It refused to take part in last April’s vote, which effectively formalized the first adoption of the NZF and has recently gone so far as to threaten retaliatory action against countries supporting such measures. This includes refusing to let ships flying flags of countries supporting the NZF from entering US ports and imposing various types of trade sanctions.
According to reports from the MEPC extraordinary session, a number of countries that had previously supported the measures and approved the IMO’s Net-Zero Framework in April 2025 subsequently abstained or changed their vote at the October meeting. China, the world’s largest shipbuilder, went from supporting the measure in April to voting for its postponement. Opponents also include major fossil fuel-producing countries such as Saudi Arabia and Russia, many of which have argued that the IMO’s Net-Zero Framework provokes global divisions and overlooks the potential financial impacts on citizens and economies.
Major shipping countries like Singapore and Liberia have also raised objections.
According to Vinson & Elkins, criticism of the framework focuses mainly on the lack of a sufficient supply of clean fuels to allow greenhouse gas intensity targets to be met.
It points out that “Although the IMO Net-Zero Framework incorporates a credit-purchasing system as a compliance pathway, recent studies call into question the availability of these credits to meet demand given the limited ability to bank credits for future years and the lack of fuels capable of meeting the IMO’s GHG intensity targets.” The market analysis company also stresses that the estimated revenues that are to make up the Net Zero Fund are currently not sufficient to scale the next generation of low-carbon fuels for the shipping sector.
The postponement clearly represents a victory for the Trump administration and puts the European Union in even greater difficulty, as it now appears unable to adopt a common position to present at the 30th United Nations Climate Change Conference, to be held from 10th to 21st November 2025 in Belém, Brazil.
According to Lloyd’s List, EU environment ministers were only able to agree on a joint text after accepting Greece’s request to remove any positive references to IMO measures from the text.
Athens’s stance is a tough one, effectively confirming the breakdown of European unity on the issue of environmental sustainability. This position was clearly echoed in an editorial by Greek Prime Minister Kyriakos Mitsotakis, recently published in the Financial Times. It shows the Hellenic Republic considers all this emphasis on decarbonization in shipping to be “short-sighted”, especially in a context where coal and oil continue to be used on land without any problems.
Mitsotakis’ scepticism about the direction taken by the EU in the fight against environmental pollution raises questions about how the path to Net Zero has been designed. It suggests that the issue may have been dealt with too hastily and that the regulatory framework proposed by the IMO currently has serious weaknesses and unjustifiably high penalties for shipping. If such measures were to be accepted, they could have serious repercussions on global trade.
As the Vinson & Elkins analysis put it: “The one-year delay is likely to amplify the existing uncertainty for the shipping industry, as there will be increased pressure from nations opposed to the measures to abandon or roll back the measures as previously approved.”
It’s a stalemate scenario and the political equilibrium in the EU is getting increasingly precarious. It is difficult to imagine any positive implications for a regulation that hardly anyone likes: neither those in favour of a more radical decarbonisation, who consider the NZF to be unambitious, nor its opponents, who would like to see a softer approach from the IMO and the EU. It is likely, in fact, that from now on Brussels will proceed taking one step forward and a number of steps back.
