US rejects IMO Net Zero Framework as a tax on shipping

The United States is demanding the International Maritime Organization scrap its Net Zero Framework, labeling the proposed carbon fund a tax that could cost the industry up to $265 billion annually. Federal Maritime Commission Chairman Laura DiBella told the IBIA Annual Conference in New York that the framework is anticompetitive and will never be enforced by the U.S.

The Trump administration and the U.S. delegation, supported by nations including Saudi Arabia, call for a common sense approach where compliance is voluntary, flexible, and market-based. DiBella asserted that the current rush to resolve decarbonization challenges undermines compromise and that the framework must be rethought before the Marine Environment Protection Committee (MEPC) meets in late November.

Analysis by the FMC suggests the proposed carbon fund would create a financial burden of $53 billion to $265 billion every year. Prior estimates from the commission in 2025 indicated this would add $100 to the cost of every container shipment and $50 for every cruise passenger. DiBella stated that any financial mechanism must remain under the authority of member states rather than being distributed by the IMO.

The U.S. is pushing for a single emission intensity target that accounts for fuel availability and affordability. This proposal includes recognizing LNG, bio-LNG, ethanol, and biodiesel as viable pathways. DiBella noted that strict fuel standards in previous drafts would have impacted 97 percent of the global fleet, making them liable for charges that would eventually reach consumers.

Why it matters

The U.S. refusal to accept an IMO-managed fund threatens to fracture the global regulatory environment. For shipowners and charterers, this means the prospect of a unified global carbon price is receding. Instead, the industry faces a high risk of regional or state-level levies, complicating compliance and financial planning for international trade routes.

The specific mention of LNG and biofuels as viable pathways provides a clear signal to owners of dual-fuel tonnage. The U.S. is positioning itself as a defender of these assets against more restrictive fuel standards. This stance protects current capital investments but creates friction with IMO members seeking more aggressive shifts away from all fossil-derived fuels.

The demand for voluntary compliance creates a fundamental contradiction for the industry. While bunker executives at the IBIA Conference noted that regulation brings stability for large capital investments, the U.S. push for flexibility suggests that a firm, global deadline is unlikely. This leaves owners in a holding pattern, weighing the risk of fragmentation against the need for a realistic solution.

For container and cruise operators, the FMC’s cost projections are a direct warning of margin pressure. If the U.S. successfully blocks the IMO fund, these specific per-shipment and per-passenger costs may be avoided in the short term, but the underlying pressure to decarbonize will likely reappear through more complex, localized port or state requirements.

What to watch

The Marine Environment Protection Committee (MEPC) session and the subsequent Extraordinary Session beginning on November 30 will determine if the U.S. coalition can force a pivot toward its voluntary, state-controlled model.

Source: The Maritime Executive