Hello QueSeanians,
In April 2025, during MEPC 83, the United States withdrew from negotiations in London regarding advancements in shipping sector decarbonisation. The U.S. government had stated it will consider reciprocal measures to counteract any fees imposed on American vessels.
Yesterday, a statement was issued by Secretary of State Marco Rubio, Secretary of Commerce Howard Lutnick, Secretary of Energy Chris Wright, and Secretary of Transportation Sean Duffy.
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President Trump has made it clear that the United States will not accept any international environmental agreement that unduly or unfairly burdens the United States or harms the interests of the American people. This October, members of the International Maritime Organization (IMO) are poised to consider the adoption of a so-called “Net-Zero Framework,” aimed at reducing global greenhouse gas emissions from the international shipping sector.
Whatever its stated goals, the proposed framework is effectively a global carbon tax on Americans levied by an unaccountable UN organization. These fuel standards would conveniently benefit China by requiring the use of expensive fuels unavailable at global scale. These standards would also preclude the use of proven technologies that fuel global shipping fleets, including lower emissions options where U.S. industry leads such as liquified natural gas (LNG) and biofuels. Under this framework, ships will have to pay fees for failing to meet unattainable fuel standards and emissions targets. These fees will drive up energy and transportation and leisure cruise costs. Even small vessels would incur millions of dollars in fees, directly driving up costs for American consumers.
The Trump Administration unequivocally rejects this proposal before the IMO and will not tolerate any action that increases costs for our citizens, energy providers, shipping companies and their customers, or tourists. We will fight hard to protect the American people and their economic interests. Our fellow IMO members should be on notice that we will look for their support against this action and not hesitate to retaliate or explore remedies for our citizens should this endeavor fail.
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In addition, the paper MEPC/ES.2/2/4 provides a “Detailed techno-economic analysis of the mechanism and measures proposed in Circular Letter No.5005 and identification of their associated risks” submitted to the next exraordinary session planned for October 2025 at IMO by Bahrain, Iran (Islamic Republic of), Iraq, Kuwait, Saudi Arabia, United Arab Emirates, Venezuela (Bolivarian Republic of) and Yemen.
According to MEPC/ES.2/2/4, a fundamental element of the approved measures and two-tier compliance mechanism is the generation of surplus units (SUs) from qualifying ships that can subsequently be leveraged by under-compliant ships. Generation of SUs is directly proportional to the difference between attained GFI and the direct compliance limit. The wider this difference, the larger the generation of SUs and the greater the potential that a lower-carbon fuel will be more attractive than the use of conventional fuel with required remedial units (RU), or “pay to comply”.
The steep reduction in the proposed GFI trajectory limits this potential. Counter-intuitively, this leads to a reduced uptake of lower-carbon fuels vs. a more pragmatic GFI trajectory. The large gap between base and direct compliance GFI further exacerbates this.
As a result, the approved measures do not promote the use of lower-carbon fuels but rather promote the accumulation of funds from the collection of RU by “pay to comply” ships. As a result, the framework in its current form creates a scenario where the intended objectives of the 2023 IMO GHG Strategy are undermined, as the focus shifts towards financial compliance, thereby detracting from the genuine implementation of the framework.
In October 2025, a two-thirds majority of the 108 ratifying member states will be needed to pass legislation to lower shipping emissions. If the mid-term measures will be adopted in October 2025, they are set to take effect 16 months later through the “tacit acceptance” process.
Check more information here about the IMO “tacit acceptance” procedure: What’s on the Agenda for the Extraordinary MEPC/ES.2 Session This October 2025?