The United States and China have clashed head-on over environmental regulations to curb greenhouse gases emitted by ships that ply the seas. The United States has called the rules an unfair burden on its shipping and shipbuilding industries and warned of retaliation against countries that vote in favor. China, which has overwhelming newbuild capacity, is actively supporting the measures, seeing stronger regulations as a chance to win more orders for eco-friendly ships.
According to the shipping industry on the 16th, the International Maritime Organization (IMO) is holding the second extraordinary session of the Marine Environment Protection Committee (MEPC) at its London headquarters from the 14th to the 17th to discuss adopting the "Net-Zero Framework" to reduce ship greenhouse gases.
The Net-Zero Framework refers to a set of measures for the global shipping industry to achieve net greenhouse gas emissions of "0" (net zero) by 2050 in response to climate change. It aims to cut carbon by changing the types of fuel used for ship operations and the expense structure. It sets standards for ▲ global marine fuel and ▲ greenhouse gas emission pricing, and seeks consensus among countries.
At this meeting, the key is whether to adopt the "MARPOL Annex VI amendment," a core measure of the Net-Zero Framework. It assigns specific expenses to the emission and reduction of greenhouse gases from ships worldwide and constitutes an international norm with legal force.
Under the amendment, ships are evaluated each year based on the carbon intensity of their fuel. If they emit more carbon than the benchmark, they must pay a levy into the IMO Net-Zero Fund or purchase surplus reductions. Ships with strong reduction performance can sell allowances or receive incentives. Ships using carbon-neutral fuels are rewarded. If the amendment mandating greenhouse gas emission cuts for ships is adopted at this meeting, it is expected to take effect starting in March 2027.
The United States and China have been engaging in a war of nerves ahead of this meeting. In Apr., the United States withdrew from the IMO negotiations on the Net-Zero Framework and has been voicing strong opposition. It says tougher fuel standards and carbon levies will increase the burden on the shipping industry.
On the 10th (local time), senior government officials, including Secretary of State Marco Rubio and Minister of Energy Chris Wright, said in a joint statement that they "will not tolerate measures that pass on additional expense to citizens, energy corporations, the shipping industry, and tourists." They also warned that countries that vote in favor of the agenda could face retaliatory measures such as restricting port access, visa sanctions, commercial disadvantages, additional port fees, and financial sanctions.
China, on the other hand, supports the greenhouse gas reduction proposal. China accounts for a majority of global newbuilds, and stronger fuel regulations could bring a windfall if orders for eco-friendly ships increase. According to Clarksons Research, a British shipbuilding and shipping market analysis firm, China took 56% of the world's cumulative orders from January to September this year.
There are 176 member states of the IMO in total, and 108 parties to "MARPOL Annex VI" hold voting rights on whether to adopt the Net-Zero Framework. The resolution passes with at least two-thirds support among the 108, excluding abstentions. The IMO plans to gather member states' views and announce the results on the 18th.
Korea's IMO delegation is headed by the Ministry of Oceans and Fisheries. Although it has not expressed a position publicly, the industry expects the ministry to vote in favor of adopting the Net-Zero Framework.
A shipping industry official said, "This regulation is an important issue that could increase expenses and also has the character of a maritime hegemony war between the United States and China," adding, "The global shipbuilding and shipping industries are watching the outcome."