NEWS

Governments at the International Maritime Organization decided to postpone for one year the adoption of the world’s first global carbon pricing system on shipping at the Extraordinary Session of the Marine Environment Protection Committee in London this week.

The IMO agreed to delay the planned adoption vote on the Net-Zero Framework for one year in a vote Friday due to delay tactics and procedural sabotage by the U.S., Saudi Arabia, Russia and other petrostates at this week’s negotiations. The motion to delay was put forward by Singapore and called to a vote by Saudi Arabia.

The IMO’s delay reveals the fragility of climate action when national politics clash with global regulation. For shipping—a sector that moves 90% of world trade and produces 3% of global emissions—the path to net zero just became longer and far more uncertain.

Heading into this week’s meeting, a clear majority of countries had supported the adoption of the Framework, which was agreed in principle in a vote in April. In April, 63 countries voted yes, including the EU27, Brazil, China, India, Canada, UK, Korea and Japan, versus a minority opposition from 16 oil-producing states.

In the lead up and throughout the meeting, the Trump Administration threatened retaliatory tariffs and sanctions, especially on developing and most climate-vulnerable states, if they support the Framework.

According to our sources, the U.S. and Saudi Arabia also tried to create a delay by proposing to change the IMO’s regular adoption process by consensus to an ‘explicit’ adoption process which would impose additional hurdles to enforce the Framework, especially for many developing countries.

Countries ultimately voted to delay adoption of the NZF at MEPC E.2 with 57 countries in favor of delay, 49 countries against the delay, and 21 abstentions.

The agreement would have had a positive effect on the price gap between fossil fuels and alternative fuels, essential for shipping’s energy transition.

As the world’s first, the mechanism would require ships to pay fees for non-compliance with gradually increasing carbon intensity targets, expected to generate up to $15 billion per year in finance from 2030. The original entry into force of the NZF was planned for March 2027. This timeline will now have to be reviewed.

This pause will push the adoption vote to the next session in October 2026, and it could risk the deal not coming into force until 2030, even if adopted in a year’s time.

The IMO is still set to meet again for technical discussions on 20-24 October, to discuss key policy details on design and implementation of the NZF, including green energy incentives and the revenue disbursement.

Some delegates believe that putting the talks on hold will give countries more time to find consensus on this flagship climate law. Others fear that the U.S. will further ramp up pressure on developing countries to oppose adoption at a later stage.

The agreement includes a requirement for the gradual reduction of the greenhouse gas intensity of the fuels ships use. Ships that emit more than allowed will have to pay, while the most energy-efficient vessels can earn and trade surplus units, as well as receive rewards for using green fuels. Emitting greenhouse gases will become more expensive and reducing them will pay off.

The NZF, as it stands, is the result of three years of discussions from national delegate countries and is the only global regulation for greenhouse gas reduction measures, which aims at avoiding patchworked national regulation.