National delegates at the International Maritime Organization (IMO) decided to postpone for one year the adoption of the world’s first global carbon pricing system on international shipping polluters at the Extraordinary Session of the Marine Environment Protection Committee (MEPC E.2) in London that ended on 17 October.
The IMO agreed to delay the planned adoption of the Net-Zero Framework (NZF) for one year in a vote this Friday due to delay tactics and procedural hurdles created by the US, Saudi Arabia, Russia and other petrostates at this week’s negotiations. The motion to delay was put forward by Singapore and called to a vote by Saudi Arabia.
A clear majority of countries at the MEPC E.2 were in support of the adoption of the framework, which was agreed in principle in a vote in April. Sixty-three countries had voted yes (including the EU27, Brazil, China, India, Canada, UK, Korea and Japan) versus a minority opposition from 16 oil-producing states.
The NZF is seen as a groundbreaking move for the shipping industry to mind its carbon footprint, especially for ships weighing over 5,000 gross tonnes. The framework was initially meant to have been set in motion starting 2028. It proposes a system of credits and penalties, akin to carbon credits, where ships that do not conform to emission limits are expected to offset the harm they do to climate by buying “remedial units”. The lesser polluters, which keep to the emission limits, can earn revenue by selling their carbon surplus units. Revenues are expected to go into an IMO Net-Zero Fund to support clean-fuel adoption and help developing countries transition. The original target of the NZF was to generate about $15 billion per year in finance from 2030.
The NZF was proposed to have been set in place from March 2027, which appears to be an impossible target now.
However, before and during the MEPC E.2 meeting, the Trump administration resorted to its favourite tool of exerting pressure by threatening retaliatory tariffs and sanctions, especially on developing and most climate-vulnerable nations, if they supported the framework. While delegates from many developing countries called out the US, calling its tactics as “bullying”, “unprecedented” and “undiplomatic”, they could not present a united front against them.
The US, aided by its long-time ally Saudi Arabia, proposed a change in the IMO’s regular adoption process by consensus to an “explicit” adoption process which was aimed at creating more hurdles for the adoption of the NZF. Fifty-seven countries voted to delay the adoption of the NZF at MEPC E.2, while 49 countries against it and 21 stayed absent.
Reacting to the IMO’s failure to adopt the NZF, Ralph Regenvanu, minister for climate change, Republic of Vanuatu, said: “We came to London in reluctant support of the IMO’s Net-Zero Framework. While it lacks the ambition that climate science demands, it does mark a significant step. We regret that IMO members followed Singapore’s initial proposal to delay the adoption of the framework by 12 months, which Saudi Arabia called to a vote. This is unacceptable given the urgency we face in light of accelerating climate change.”
The delay in adopting the framework divided the delegates. Some believed that putting the talks on hold would give countries more time to find consensus, while others doubted the intention of the US and its allies and feared that they would use this time to win over more countries through arm-twisting.
Alisa Kreynes, director for ports and shipping at C40, a global network of mayors fighting climate change, said: “The inability to reach an outcome is a missed opportunity to accelerate a just and equitable transition in global shipping. Another chance to scale and invest in clean fuels has been missed, stalling inclusive climate action yet again. Small Island States and the Global South will continue to pay the biggest price for this inaction.”
The IMO is set to meet again for technical discussions (ISWG-GHG-20) on 20-24 October to discuss key policy details on design and implementation of the NZF, including green energy incentives and the revenue disbursement.
