US Push Against IMO Shipping Carbon Levy Keeps Net-Zero Framework in Uncertain Waters

The United States has continued to push back against a proposed global carbon pricing system for international shipping, adding uncertainty to one of the most important climate policy negotiations facing the maritime sector.

The discussions are taking place at the International Maritime Organization, the United Nations agency responsible for regulating global shipping. The IMO has been developing a Net-Zero Framework that would combine a global fuel standard with a pricing mechanism for emissions from ships. The aim is to help align the sector with the IMO’s target of reaching net-zero greenhouse gas emissions from international shipping by or around 2050.

The framework was approved in principle in April 2025, but formal adoption has become more difficult after opposition from the US, Saudi Arabia, and other countries. According to Sustainable Views, 51 countries, including the US, Saudi Arabia, and the United Arab Emirates, are seeking substantial changes to the proposal.

The US position reflects broader opposition from the Trump administration to international climate measures that could raise costs for fossil fuel use or create new emissions-related charges. For shipping, the debate is particularly sensitive because the sector is deeply tied to trade, energy security, fuel markets, and consumer prices.

What the IMO Framework Would Do?

The IMO Net-Zero Framework has two main parts.

The first is a global fuel standard. This would require ships to reduce the greenhouse gas intensity of the fuels and energy they use over time. In practical terms, vessels using high-emission fuels would face increasing pressure to improve efficiency, switch to lower-carbon fuels, or buy compliance units.

The second is a pricing mechanism. Ships that exceed agreed emissions limits would need to pay into an IMO Net-Zero Fund or use surplus units generated by better-performing vessels. The fund is intended to support the deployment of low-emission ships, clean fuel infrastructure, research, training, technology transfer, and transition support for developing countries.

The rules would apply to large oceangoing ships above 5,000 gross tonnage. These vessels account for most international shipping emissions and are already covered by IMO fuel data collection requirements.

If adopted, the framework would be added to MARPOL Annex VI, the global treaty covering air pollution from ships. That would make the rules part of the core international regulatory system for maritime emissions.

Why is Shipping Difficult to Decarbonize?

International shipping is one of the hardest sectors to bring in line with net-zero goals. It carries much of the world’s trade, operates across jurisdictions, and depends heavily on fossil-based marine fuels.

Large vessels can operate for 20 to 30 years, meaning decisions made today on ship design, engines, and fuel systems can lock in emissions for decades. At the same time, alternatives such as green methanol, ammonia, hydrogen-based fuels, and sustainable biofuels are still limited in availability and often more expensive than conventional fuels.

Ports also need new infrastructure before cleaner fuels can be supplied at scale. This includes storage, bunkering equipment, safety systems, and certification processes. For some fuels, such as ammonia and hydrogen, safety and handling requirements remain major operational considerations.

These challenges are why many governments and industry groups argue that global rules are needed. Without a common framework, shipping companies could face a fragmented system of regional carbon prices, fuel standards, and reporting rules.

What is at Stake for Shipowners?

For shipowners and operators, the final shape of the IMO framework will influence fleet planning, fuel procurement, and long-term investment.

A clear carbon price would make high-emission fuels more expensive over time. That could improve the business case for energy efficiency upgrades, wind-assist technologies, route optimization, dual-fuel engines, and alternative fuel vessels.

It would also affect chartering contracts. Cargo owners and ship operators would need to decide how compliance costs are shared, particularly in contracts where one party controls the vessel and another controls fuel decisions.

For companies ordering new ships, the uncertainty is significant. A vessel built today may still be operating in the 2040s or 2050s. If the IMO adopts a strong global pricing system, ships that cannot use lower-carbon fuels could face rising compliance costs and lower resale values. If the framework is weakened or delayed, the incentive to invest in cleaner vessels may be reduced in the near term.

Fuel Suppliers and Ports Face Investment Decisions

The debate is also important for fuel suppliers, ports, and infrastructure investors.

A global fuel standard would create demand for lower-carbon marine fuels. That could support investment in green methanol, ammonia, synthetic fuels, advanced biofuels, and renewable hydrogen supply chains. However, these markets need long-term demand signals before large projects can reach final investment decisions.

Ports would also need to decide which fuels to support. Not every port can build infrastructure for every possible fuel pathway. A stronger IMO framework could help narrow the investment case by giving clearer guidance on which fuels are likely to gain market share.

At the same time, developing countries and smaller ports may need financial and technical support to avoid being left behind. This is one reason the proposed IMO Net-Zero Fund has become central to the talks. Supporters argue that revenue from a levy could help finance a fairer transition, particularly for countries that rely heavily on maritime trade but lack capital for new infrastructure.

Cost Concerns Remain Central to the Dispute

Opponents of a shipping carbon levy argue that it could increase freight costs and place pressure on consumers, exporters, and import-dependent countries.

Shipping costs are only one part of the final price of most goods, but even modest increases can matter for low-margin commodities, food imports, energy products, and long-distance trade routes. Small island states and remote economies are particularly exposed because they depend heavily on maritime transport.

The IMO has recognised that any emissions pricing system must consider impacts on food security, trade costs, and vulnerable economies. The challenge is designing a mechanism that reduces emissions while avoiding unfair burdens on countries with fewer alternatives or higher transport dependency.

Supporters of the levy argue that delaying action also carries costs. Without a global price signal, clean fuel production may scale more slowly, shipowners may postpone investment, and the sector may become more exposed to fragmented regional regulation.

Regional Rules are Already Moving Ahead

The IMO talks are taking place as regional regulation is already expanding.

The European Union has included maritime transport in its emissions trading system. It has also introduced FuelEU Maritime, which requires ships calling at EU ports to reduce the greenhouse gas intensity of onboard energy use over time.

These measures are already changing compliance obligations for companies trading with Europe. If the IMO fails to agree on a global approach, more regions could introduce their own systems. That would increase complexity for shipowners operating across multiple jurisdictions.

A global IMO framework would not remove all regional measures immediately, but it could create a more consistent baseline for emissions reductions and pricing.

Implications for Cargo Owners and Investors

Cargo owners, retailers, and manufacturers will need to track the negotiations closely. Many companies with net-zero targets rely on shipping to move goods across global supply chains. A stronger IMO framework could increase near-term freight costs, but it could also help reduce Scope 3 emissions from logistics over time.

Investors and lenders also have a direct interest. Banks financing vessels will need to assess whether ships are aligned with future emissions rules. Insurers may need to consider transition risks linked to fuel safety, compliance costs, and asset values. Infrastructure investors will look for signals on which clean fuel supply chains are likely to grow.

For energy companies, the IMO process could influence demand for alternative fuels and the future role of liquefied natural gas, biofuels, and synthetic fuels in marine markets.

Negotiations Remain Unresolved

The proposed IMO Net-Zero Framework remains on the table, but its final design is uncertain. Continued US-led opposition to a shipping carbon levy could lead to changes in the pricing mechanism, slower implementation, or a weaker compliance structure.

For the maritime sector, the lack of certainty is itself a challenge. Shipowners, ports, fuel producers, and cargo owners are making investment decisions now that will shape emissions for decades.

The central issue is whether international shipping will decarbonize under a common global framework or through a more fragmented mix of regional rules and voluntary measures. The IMO negotiations will determine how quickly the sector receives the regulatory clarity it needs.

Source: www.sustainableviews.com