It has been reported that a majority of International Maritime Organisation (IMO) member states narrowly voted this week to delay a decision on the Net Zero Framework (NZF) for global shipping by one year. This follows intense lobbying by the US and Saudi Arabia.
The postponement, decided during an extraordinary meeting in London, was backed by oil-producing nations, China, and major flag states like Liberia and Panama, while most EU countries, Norway, and the UK opposed the move.
The delay follows US President Donald Trump’s public opposition to the proposed carbon tax on shipping emissions, referring to it as a “Green Scam”. Observers believe that this influenced the vote. Trump’s intervention, combined with resistance from key allies, shifted momentum away from adopting the NZF – a framework that included a carbon tax and green fuel requirements. Had the vote proceeded, the agreement risked rejection, which would have undermined the IMO’s credibility as a global regulator.
BIFA on behalf of its Members is disappointed at this result. The cost of decarbonising the sector, some argue that it will cost at least $3trillion dollars. The disruption will be considerable including the need to establish new bunkering arrangements.
Many argue that, without the IMO introducing a universal approach to decarbonising maritime transport, there is no business case to transition to new fuels that emit less GHGs. Also, the IMO-led framework is vital to prevent carbon leakage in maritime transport. The alternative will be a series of Inconsistent regional regulations, each with variable regulations. This will lead to a confusing patchwork of Emission Trading Schemes, each with its own charging structure.
Fragmentation would not only weaken decarbonisation efforts but also create unfair competitive conditions, particularly for European operators. The shipping industry and its clients’ needs clarity, not further uncertainty.
We do not pretend that the proposals were perfect, they were complex and there were significant gaps in detail such as the collection mechanism, but the two year implementation period could have been used to refine the proposals and introduce a workable solution.
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