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The United States announced that it will retaliate against countries that next October will confirm their support to the International Maritime Organisation's (IMO) Net-Zero Framework (NZF), a plan to reduce greenhouse gas emission intensity in the shipping sector.
In a joint statement released in mid-August, Secretary of State Marco Rubio, Secretary of Commerce Howard Lutnick, Secretary of Energy Chris Wright and Secretary of Transportation Sean Duffy justified the threat as a form of protection for US citizens and businesses against an agreement that “is effectively a global carbon tax on Americans” that would impose “fuel standards [that] would benefit China.”
However, “the announcement includes some factual inaccuracies,” explains to Renewable Matter a source close to the dossier that prefers to remain anonymous. “The joint statement reads that the Net-Zero Framework includes taxes on Americans, but this is not accurate. The NZF does not target any country because it applies globally. Currently, it is very difficult and ineffective to enforce all these fragmented regulations at national level.”
“Moreover, it is incorrect to say that the NZF is against Americans and in favour of China. Nor is it true that there will be taxes on small vessels”, the source adds, explaining that the NFZ will become mandatory for large ocean-going vessels. These ships, with a gross tonnage of more than 5,000 tons, emit 85% of total CO₂ emissions from international shipping. Finally, the source continues, “it is not true that the NZF prohibits the use of LNG and biofuels. In fact, it is technology-neutral and fuel-neutral.”
“The joint statement simply follows up on the position the US took in April”, tells Renewable Matter Dr Aly Shaw, IMO Policy Manager at Transport & Environment. “Their pressure tactics were unsuccessful, and the IMO's Net-Zero Framework was approved with a substantial majority of member states in favour, along with an endorsement from the industry. It is time to focus on implementing this framework, rather than on the distraction and delay tactics of Trump's pushback on climate policy."
What does the Net-Zero Framework entail?
In response to EU policies for decarbonising the shipping sector – such as the Emission Trading System and the FuelEU Maritime Regulation – the IMO set ambitious climate targets in 2023: reducing by 20-30% the annual greenhouse gas emissions of the sector within 2030 and by 70-80% within 2040 compared to 2008 levels. It also included a net-zero emissions target around 2050.
The Net-Zero Framework, approved in the 83rd session of the Marine Environment Protection Committee (MEPC 83) held from 7 to 11 April 2025, is the set of regulations that will serve to achieve these targets and includes three main points. The first entails an obligation to reduce the greenhouse gas intensity of fuels (GHG Fuel Intensity, GFI, that is the amount of greenhouse gases emitted per unit of fuel used), with increasingly ambitious reduction targets over time.
The second includes economic incentives to comply with these obligations: ships that do not meet the GFI reduction targets will pay “remedial units”, calculated basing on excess emissions, at a fixed price (currently set at $380/tonne of CO₂eq). This money will flow into the Net-Zero Fund, which will provide financial incentives for ships using zero- or near-zero-emission technologies/fuels. The third sets global standards for fuels, in the sense that fuel performance is technology-neutral, focusing on greenhouse gas emissions per unit of energy, without excluding any type of fuel.
The Net-Zero Framework is expected to be formally adopted at an extraordinary IMO meeting to be held from 14 to 17 October. After the meeting, the NZF will be incorporated into a new chapter of Annex VI of MARPOL on the prevention of air pollution from ships.
“Though we would have preferred higher levels of ambition in the policies, the Net Zero Framework (NZF) includes both incentives for decarbonization and revenues and policies that can support small islands developing states and least developed countries participate in, and not be punished by, the maritime energy shift. The NZF provides a solid foundation for us to build on and, as IMO policies are binding, this is an opportunity to drive emissions reductions from a big industry” explains to Renewable Matter Delaine McCullough, director of the Shipping Program at Ocean Conservancy and chair of the Clean Shipping Coalition. "The NZF is a hard-fought compromise and it was approved with a significant majority of member states in favor (63 to 16) [plus 20 abstentions, ed.], along with endorsement from the industry. By sticking together to adopt the NZF, countries can support each other in tackling shipping’s massive contribution to the climate crisis in an equitable way, which is what they have committed to do."
Also according to Hanna Bach, researcher at the Department of Food and Resource Economics at the University of Copenhagen specialising in transitions to sustainability in the maritime transport sector, the Net-Zero Framework “is not sufficient for the decarbonisation of the shipping sector because it is unambitious and vague, and it is too slow.” However, she explains to Renewable Matter that "given the geopolitical situation, it can be considered a success. It is not enough but it is something we can build on.”
The geopolitics of the International Maritime Organisation
Bach explains that the balance of power among states in the IMO is different than in other international contexts. “Any shipping company is free to register its ships in any country, which is called the ‘flag state’. And ship owners register their ships where it is more convenient. Therefore power dynamics within the IMO are uneven. Here what matters is the volume of goods registered in the country and not the GDP or the number of citizens. Panama, Liberia and the Marshall Islands have many registered ships and wield a lot of power. The United States is not a major flag state. In fact, it has many shipping companies but not many registered ships.”
During the April meeting, the European Union, Southeast Asian and Latin American countries voted in favour of the Net-Zero Framework and, surprising many observers, so did China and Brazil. However, Saudi Arabia, the United Arab Emirates, Russia, Iran, Iraq, Pakistan, Yemen, Malaysia, Thailand, Venezuela, Oman, Jordan and Bahrain voted against it. The United States “withdrew from the talks in April and threatened retaliation against countries that supported the agreement, but so far we have seen nothing concrete, at least not explicitly,’ Bach continues.
However, a source closely following the IMO negotiations told Renewable Matter that the United States has now begun to contact member states directly, urging them to oppose the Net-Zero Framework in October and reiterating the prospect of retaliatory measures already outlined in their previous statement. Nonetheless, on 16 August, the President of Panama expressed his support for the Net-Zero Framework and the International Chamber of Commerce (ICCC), which represents industry, has already submitted a proposal to the October session pushing for its adoption.
The controversial issue of biofuels
“We know that to implement this type of regulations, that encourages transitioning towards more sustainable solutions, we need both carrot and stick tools: promoting sustainable technologies and practices on the one hand, and hindering the use of fossil fuels on the other. The biggest flaw in the Net-Zero Plan is that it seeks only to hinder fossil fuels use by mandating greater energy efficiency, but it lacks incentives for more sustainable fuels. In short, there is no carrot and the stick is not strong enough," Bach explains.
In an analysis released in April, Transport & Environment highlights the same issue, due to the adoption of technology-neutral standards for fuels. The analysis reads that “[...] the biggest problem is that the IMO deal risks creating a huge new market - potentially doubling the global biofuel market, including roads, by 2035 - for rainforest-destroying biofuels like palm and soy.”
"By refusing to include indirect land use change or to otherwise restrict land-hungry biofuels, the deal makes crop biofuels and LNG the cheapest compliance options until at least 2035, and thus the go-to options for most shipowners. Of course, this is no coincidence. European negotiators were so desperate to secure a deal with the support of Brazil and other palm and soybean-producing nations that they signed up to a policy that would not be legal in Europe itself.”
An opportunity for decarbonisation
Hanna Bach explains that the IMO negotiations are not transparent and it is almost always impossible to know who put forward a proposal. “Before the April meeting, there was a more ambitious proposal at stake. It was publicly said to have been put forward by the Marshall Islands and that at some point was also supported by the European Union. But during the actual negotiations a change occurred, and at the time of voting the Marshall Islands' proposal was no longer there.” The expert explains that for this reason the Marshall Islands abstained from voting, “to firmly emphasize that they did not think the agreement was ambitious enough.”
The researcher underscores that decisions at the IMO are made very slowly, and the Marshall Islands would like much more ambitious decisions, since they are in a very delicate position due to sea level rise. “The positive thing here is that we have seen that when it comes to regulations on air pollution, the EU's ambition trickles down to the IMO,” Hanna Bach concludes. “‘EU going first’ is a strategy that works.”
Cover: IMO