Because of strong opposition from U.S. President Donald Trump, deliberations on adopting a comprehensive plan to cut shipping greenhouse gases at the United Nations' International Maritime Organization (IMO) have been postponed for a year. Officially, the vote was delayed for a year, but observers say the proposal is unlikely to pass while Trump wields influence. The shipping industry appears relieved as the expense burden eases.
According to the shipping industry on Oct. 20, the IMO held the Marine Environment Protection Committee (MEPC) at its headquarters in London, England, and, after discussing whether to adopt "midterm measures to reduce greenhouse gases from ships," decided to postpone a decision for a year. Saudi Arabia, which opposed adoption, proposed a one-year delay vote, and 57 countries supported it. Forty-nine countries opposed.
The IMO is pursuing a "net-zero framework" to reduce greenhouse gases in international shipping. If the measure had been approved, international ships of 5,000 tons (t) or more would have been subject to greenhouse gas emission rules starting in 2027. If a ship's fuel oil failed to meet the greenhouse gas intensity standard, a surcharge would be imposed during operations.
Saudi Arabia, which proposed the one-year delay, has opposed the measure out of concern over declining oil demand. In contrast, China, which is strong in shipbuilding, supported the measure, expecting more orders for eco-friendly ships. The Ministry of Oceans and Fisheries, which heads Korea's IMO delegation, is said not to have stated a position during the meeting.
The United States strongly pushed back against the greenhouse gas rules and warned of retaliation, including tariffs, visa issuance limits, and bans on entering U.S. ports, against countries supporting the measure. U.S. Secretary of State Marco Rubio posted on social media (SNS) after the delay decision, saying, "Another big win. Thanks to President Trump's leadership, we blocked the U.N.'s massive tax hike."
The domestic shipping industry is relieved. According to the Korea Shipowners' Association (KSA), eco-friendly vessels account for only 5.9% of domestic shipping companies' fleets. Carriers with large fleets and extensive international routes, such as HMM, Sinokor Merchant Marine, and Pan Ocean, were facing the need to invest massive expense in introducing or retrofitting eco-friendly ships.
In 2023, the Korea Maritime Institute (KMI) estimated that if the IMO's midterm measures were introduced, domestic shipping companies (95 companies with 1,094 vessels) would face annual carbon charges of at least 1.07 trillion won to as much as 4.8916 trillion won. A carbon charge is a system that applies a set tax (price) per 1 t of greenhouse gas emissions, calculated by multiplying the carbon amount by the rate. Because the carbon price has not yet been set, the expected range of carbon charges is wide.
With President Trump claiming climate change is a hoax, some expect the IMO's midterm measures will be difficult to pass during his term. A shipping industry official said, "We have bought time for now, but carbon reduction is an unstoppable trend, so we are preparing."