A plan to impose the world’s first shipping carbon tax collapsed Friday after the United States led a campaign to derail the measure, forcing the United Nations’ International Maritime Organization (IMO) to delay a final vote for at least a year.
The decision came after four days of tense talks in London that exposed deep rifts between oil-producing nations and countries seeking stronger climate action.
The proposed carbon-pricing plan—known as the Net Zero Framework—would have charged shipping companies for emissions exceeding set limits, with proceeds funding cleaner fuels and climate aid for vulnerable nations.
Backed by the European Union, Brazil, and several Pacific Island states, the initiative aimed to push the global shipping sector, which generates nearly 3% of worldwide greenhouse gas emissions, toward its 2050 net-zero goal.
But opposition hardened under President Donald Trump, who denounced the proposal as a “scam tax” and withdrew the U.S. from IMO negotiations in April.
Washington warned that any country supporting the plan could face sanctions, visa restrictions, or higher port fees. The State Department argued the levy would raise costs for American consumers and undermine economic competitiveness.
Carbon Tax Debate Exposes Global Fault Lines
The proposal to delay was introduced by Singapore and called to a vote by Saudi Arabia, passing narrowly with 57 countries in favor, 49 against, and 21 abstentions. The postponement pushes back the adoption of a framework that had been agreed in principle in April, when 63 countries, including the EU, China, India, Brazil, Canada, the UK, Japan, and South Korea, voted to support it.
IMO Secretary-General Arsenio Dominguez urged delegates to avoid further breakdowns, calling the week’s proceedings “chaotic.” Observers said the impasse underscored the difficulty of achieving global consensus on climate measures that directly affect trade and energy policy.
Small island states and developing nations, some of which had planned to back the tax after initially abstaining, expressed frustration that momentum for maritime decarbonization had stalled once again.
Without a pricing system, experts warn, the shipping sector’s emissions will continue to rise, threatening global climate targets and testing the credibility of the IMO’s climate commitments.
Framework in Doubt
The NZF would require ships over 5,000 gross tons to reduce the carbon intensity of their fuels beginning in 2028, introducing a system of credits and penalties.
Vessels exceeding emission limits would purchase “remedial units”, while lower-emitting operators could trade surplus credits. Revenues would feed into an IMO Net-Zero Fund to finance low-carbon fuel adoption and assist developing nations with the transition.
While some delegates view the delay as a chance to build broader consensus, others fear it could embolden opposition and slow progress toward the shipping sector’s decarbonization goals.
Read more: World Bank Report Makes The Case For Shipping Carbon Tax
