US threats on IMO Net-Zero Framework could backfire - industry
Industry observers say the proposed penalties could disrupt trade, raise costs for US importers and exporters, and create uncertainty in global shipping markets.
IMAGE: Aerial view of a container ship. Getty Images
Correction: An earlier version misstated how many member states the US would need to flip to block adoption. Because only MARPOL Annex VI signatories can vote this week, the US would need to flip 15 “yes” votes to “no” if 64 signatory member states are present and voting. The precise number depends on attendance.
The US State Department on 10 October reaffirmed its warning to IMO member states that back the organisation’s approved Net-Zero Framework (NZF) during this week’s vote.
The framework, which introduces the first unified emissions pricing mechanism for global shipping from 2028, was approved by a simple majority in April, with 63 votes in favor, 16 against and 24 abstentions.
Unlike in April, only Marpol Annex VI signatories are allowed to vote on adopting the framework this week. Of the 63 member states that voted “yes” in April, 57 have the right to vote for or against adoption.
Eight signatories voted “no” in April, of which seven votes counted as Iran had not paid fees.
If 64 signatories also vote this week, the US would need to flip 15 “yes” votes to “no” votes to block the two-thirds majority needed for adoption. But the number of signatories voting could very well change.
The US is now lobbying and threatening other IMO member states with retaliation if they vote "yes".
Industry observers warn it could unsettle markets.
Shipping experts warn of fallout
Lars Jensen, chief executive of consultancy Vespucci Maritime, said the penalties would ultimately burden US exporters and importers. “Imposing fees or restrictions on ships will simply raise costs for shipping to and from the US. It’s like cutting off your nose to spite your face,” he explained.
Jensen argued that the proposals reflect a fundamental misunderstanding or disregard for how global supply chains function.
"It is quite evident that these measures are either devised by people who simply do not understand how shipping works, or by those who do but see politically expedient statements as more important than economic reality," he said.
Probox, a port and terminal service provider, questioned the US approach: “Repeated sanction threats raise doubts about how the world perceives the US. Are these moves strategic and effective, or unpredictable and politically childish?”
Hans Henrick Nielsen, global development director at CargoGulf, warned that “this will create even more uncertainty in a container shipping market already under pressure,” adding that prolonged losses in Pacific trade could force operators to question why they should continue sailing.
Jonathan Benner, a senior counsel at Thompson Coburn, noted that while the US has historically contributed constructively to international maritime safety and environmental solutions, this new approach represents “a fundamental shift”. Benner said, “actively punishing nations and itself through trade disruption achieves nothing positive for the marine environment or the United States.”
Another shipping professional in India told ENGINE that, “Port fees, restricted access, and visa hurdles have a risk of backfiring. This will inevitably raise costs for US exporters and importers, additionally threatening supply chain stability, disrupting global trade, and straining overall diplomatic relations. Collaboration, technology sharing, and harmonized policies would be far more effective for decarbonization.”
Meanwhile, European shipowners, governments and climate advocates describe the IMO framework as a vital step towards decarbonising global shipping.
By Gautamee Hazarika
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