Discussions on adopting binding global rules to cut greenhouse gas (GHG) emissions from shipping began on Tuesday at the International Maritime Organization (IMO) London headquarters, with opening remarks pointing to mixed views.
The net zero framework (NZF) will be debated at the IMO's second extraordinary Marine Environment Protection Committee (MEPC) session, ahead of a vote on adoption later this week.
The US delegation described the NZF, with a global GHG pricing mechanism structure that was approved in April, as a "global carbon tax", and said it is "unprecedented" for the IMO to administer such measures. The delegation also criticised the structure of the net zero fund, and said there is no mechanism for the IMO to hold such funds.
The US delegation concluded by stating that it rejects any and all efforts to tax US vessels based on GHG emissions.
A member of the US delegation told Argus that they cannot offer an alternative structure during this meeting, but that they are working on it. When asked what next steps would be for the US if adoption of the NZF goes ahead as is, the delegate said the US might explore "further avenues" and highlighted a significant time gap until the regulation is to come into force.
A similar sentiment was echoed by nine other major oil-producing nations. The Saudi Arabian delegation said the NZF as it stands would only benefit some countries economically and therefore does not constitute "multilateralism or fair transition". This was echoed by delegates from Argentina and Iran, with the former saying the proposal should have a "fair geographic representation" and the latter raised concerns that ships under developing countries' flags lack the infrastructure to retrofit their existing vessels to alternative-fuelled ones.
The Saudi delegate described the room as a "divided house". The delegate said the Saudi position is not the "abandonment" of the NZF, and reiterated its commitment to the 2023 objectives. The delegation also pointed to "negative consequences" associated with the NZF, namely that the shipping sector will transfer any extra costs to consumers — leading to inflation. Saudi Arabia's opening remarks were supported by the delegations from Russia, the UAE, Venezuela, Iraq, Qatar, Kuwait, Libya and Somalia.
Supporters' club
Delegates showcased firm support for adopting the NZF from countries including the UK, the Netherlands, Norway, Germany, Spain, Denmark, France, Sweden, Vanuatu, Tuvalu and others.
A delegate from Germany said while the NZF is not what they wanted, it remains a fair compromise.
IMO secretary general Arsenio Dominguez said in his opening remarks that he recognised some delegates may not find the NZF "climate ambitious enough", while others think it may be "overly stringent".
But he said "prolonged uncertainty will put off investments and diminish confidence in IMO", and noted that "no specific fuel or technology has been excluded" from the NZF as compliance option.
Seven shipping associations have IMO to adopt the NZF last week, and the EU called on Sunday for adoption.
The adoption measure requires a two-thirds majority vote to pass. In the April vote on the GHG pricing mechanism structure under the net zero framework, 63 countries voted in favour, 16 opposed, and 24 abstained.
