The United States, which pushed back talks on a "ship carbon tax" within the International Maritime Organization (IMO) at the United Nations by a year, is demanding that the rules be scrapped entirely. As countries including China, which owns the most ships in the world, and Japan, which is seeking to mediate, voice their positions, some say uncertainty could grow through President Donald Trump's term, drawing attention to the potential impact on the shipbuilding industry.
According to the shipbuilding and shipping industries and foreign media including Splash 247 on the 29th, the United States recently submitted a position paper to the IMO Marine Environment Protection Committee (MEPC) and formally demanded the complete abolition of the Net-Zero Framework (NZF). It also likened the IMO to a global climate bank, saying the NZF now under discussion has flaws.
The United States argues that eco-friendly fuels, whose reliance would grow under regulation, are expensive and unproven. It also says conventional fossil fuels such as heavy fuel oil and diesel are being unfairly penalized and has stated a position that all energy sources should be included.
Since Trump was elected president, the United States has led efforts to halt regulations on the shipping industry, arguing that decarbonization rules would have serious consequences for the global economy. In Oct. last year, the IMO held the Marine Environment Protection Committee (MEPC) at its London headquarters in the United Kingdom and decided to postpone by one year whether to adopt "midterm measures to reduce greenhouse gases from ships." At the time, 57 countries, including Saudi Arabia, which proposed the delay, supported it, while 49 countries voted against.
Other countries are also submitting position papers ahead of the 84th Marine Environment Protection Committee (MEPC) to be held in Oct. Japan, moving to mediate, proposed a method in which corporations conduct a transaction within the market instead of the government collecting taxes. The idea is to allow those that emit less carbon to sell any surplus units to companies that fall short. This could be a point of mediation between the U.S. position opposing the system itself and the existing proposal by Europe and other countries for a uniform carbon tax.
China, the world's largest shipowning nation, is also said to have expressed dissatisfaction with the details. It opposes measuring embedded emissions (carbon emitted not only during combustion but also in the fuel production process) only for synthetic fuels such as ammonia, methanol, and hydrogen when calculating carbon emissions. It argues that measuring them more strictly than other fuels violates the IMO's important principle of technology neutrality. China is also classified as a powerhouse in the renewable energy sector.
The shipbuilding industry expects regulations to tighten over the long term, while also keeping short-term responses in mind. If regulations are not finalized through President Trump's term, some judge it more rational to invest more in zero-carbon propulsion ships such as hydrogen and electric vessels and in advancing ammonia-fueled ships, which are more necessary over the long term, rather than in intermediate eco-friendly ships such as LNG-fueled vessels.
An industry official said, "Because the direction toward eco-friendliness will not change, we view this as a short-term issue," but added, "Most LNG-fueled ships currently in use are LNG carriers and are not vessels targeting 2050, when carbon neutrality must be achieved, so if regulations are delayed, it could affect orders for LNG-fueled ships."
Some also see this as an opportunity for Korean shipbuilders. Even if the IMO's uniform regulations are delayed, regions can still impose environmental rules, and Korea, strong in building a wide variety of customized ships, could benefit.
An industry official said, "If countries that waited for the IMO's uniform enforcement instead implement their own regulations, shipowners in those regions may want a variety of ships that meet the rules," adding, "This could be an opportunity for Korea, which has extensive experience producing to diverse specifications."