The International Maritime Organization (IMO) will vote this week whether to approve new regulations authorizing them to charge maritime shipping companies for their carbon emissions. The measure would be the first ever carbon tax on maritime commerce and the first ever tax collected directly by a U.N. agency, which is unaccountable to the consumers who must pay higher prices as a result. Before the extraordinary session of the Marine Environment Protection Committee (MEPC) convened on Tuesday, the Trump administration issued an ultimatum warning countries against voting for the measure.
In a lopsided vote of 63-16, the MEPC approved the 120-page draft regulation during its 83rd session on April 7-11. The regulation implements a “net-zero framework” (NZF) by requiring all maritime shipping to achieve “net-zero” carbon emissions by 2050, with intermediate targets set for 2030 and 2040.
“Net”-zero carbon emissions is not the same as absolute zero. According to the regulations, ships that emit less carbon gain “surplus units,” while ships that exceed the emission threshold “will have to acquire remedial units,” said the IMO. Operating companies can cover these remedial units by “Transferring surplus units from other ships;?Using surplus units they have already banked; [or] Using remedial units acquired through contributions to the IMO Net-Zero Fund.”
In effect, the IMO regulation would take the “cap-and-trade” scheme used to limit industrial pollutants and apply it to emissions of carbon dioxide, a gas necessary for all plant life on earth. For carbon emissions above this cap, the IMO would collect what is effectively a carbon tax, to be held in a green energy fund and used on unspecified projects.
“This is the first instance we can find of the U.N. claiming the ability to levy a tax — the revenues from which will be paid directly into a U.N.-controlled fund,” wrote The Wall Street Journal editors. “That’s bad enough as an invitation to opaque special dealing and corruption. But the IMO also contemplates using the funds for ‘just-transition initiatives in developing countries’ and to ‘mitigate negative impacts’ of climate change on ‘vulnerable States.’ In other words, this is another income redistribution scheme for whatever ideas the U.N. bureaucracy deems worthy.”
The regulations would impose a two-tier tax of either $100 or $380 (depending on certain factors) per metric ton of carbon dioxide emissions, resulting in an estimated $10 billion to $12 billion collected from shipping companies. By 2035, “a mid-size carrier relying exclusively on very low sulfur fuel oil (VLSFO) … could face more than $1.5 million in additional annual expenses, or 17 to 20% of fuel costs,” according to researchers at Columbia University.
The carbon tax aims to nudge the shipping industry away from fossil fuels by making it so expensive to run fossil fuels that ships powered by non-carbon alternatives become economically viable. Currently, the leading non-carbon alternatives include green ammonia (which is two to four times as expensive as VLSFO), bio-methanol (5.7 times as expensive), and e-methanol (6.3 times as expensive).
Fuel is one of the primary cost inputs for maritime shipping, which accounts for approximately 90% of international trade. Such an increase in shipping costs could raise the cost of imported goods for Americans by up to 10%.
This is a significant impact for very little gain. Maritime shipping accounts for only 3% of man-made carbon dioxide emissions, meaning that the IMO regulations will impose a huge burden on the global shipping industry, for only a marginal reduction in carbon dioxide emissions.
The regulations would amend Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL), which entered into force on October 2, 1983. Adopted in 2005, Annex VI limits emissions of harmful pollutants such as sulphur oxide, nitrous oxides, ozone-depleting substances, and particulate matter. In 2011, Annex VI was amended with energy efficiency requirements “aimed at reducing greenhouse gas emissions.”
While Annex VI of MARPOL does control air pollution and carbon dioxide emissions, it does nothing so radical as phasing out fossil fuels. But that is exactly what the new regulations proposed by the MEPC would do.
For decades, U.N. agencies, including the IMO, have been pushing an anti-fossil fuel agenda based in climate ideology, but never to this extent. In 2018, the IMO published a strategy with the 2050 target of cutting in half the carbon emissions level of 2008. In 2023 — with the far-left Biden administration now steering U.S. policy — the IMO updated this strategy with an aspiration to eliminate carbon emissions entirely by the same date. However, this aspiration lacked the radical plan to achieve this goal through a U.N.-imposed carbon tax.
In April, the IMO was already counting its unhatched chickens with a detailed timeline: the new regulations would be officially adopted in October 2025, detailed implementation guidelines would be approved in the spring of 2026, and the regulations would enter into force in 2027, 16 months after adoption. But now, the Trump administration is trying to throw a last-minute wrench into that scheme.
Proponents for the IMO carbon tax form an unusual coalition of developed European nations and Pacific island nations. Low-lying Pacific nations are greatly concerned about rising sea levels, buy into the notion that this phenomenon is connected to manmade carbon emissions, and therefore seek to reduce those emissions to save their island homes.
Meanwhile, European nations have already implemented strict carbon emission standards at home, which puts them at a commercial disadvantage compared to other nations; they see this as an opportunity to level the playing field by imposing Europe-style carbon regulations on other nations. Thus, in a representative statement, Finland declared that the proposed IMO carbon tax would “even out the imbalance in international regulation of maritime emissions and level out the competitive environment, between the EU and the rest of the world.” After the Trump administration warned countries against voting for the plan, the European Union reaffirmed its support.
Perhaps surprisingly, the shipping industry has also endorsed the regulatory scheme. “Without the Framework, shipping would risk a growing patchwork of unilateral regulations,” read a joint statement from industry and labor associations on October 9.
In other words, shipping companies would appreciate the convenience of having to meet only one global standard, instead of different regulations in different countries. Or at least the shipping companies operating under stricter standards would like their competitors to bear the same burden. As for the higher costs these regulations would impose on global shipping, this statement proves that the shipping industry expects to pass those higher costs on to consumers.
The statement was signed by most of the world’s shipping industry: the Asian Shipowners’ Association (ASA), European Shipowners (ECSA), International Association of Ports and Harbors (IAPH), International Bunker Industry Association (IBIA), International Transport Workers’ Federation (ITF), International Chamber of Shipping (ICS), and the World Shipping Council (WSC). The ASA represents approximately 50% of the world merchant fleet, ECSA represents 35%, and the ICS represents over 80%.
On October 10, the day after the industry endorsement, the Trump administration published a full broadside attack on the scheme. In a joint statement, Secretary of State Marco Rubio, Secretary of Energy Chris Wright, and Secretary of Transportation Sean Duffy threatened “actions against nations that support this global carbon tax on American consumers:
- “Pursuing investigations and considering potential regulations to combat anti-competitive practices from certain flagged countries and potential blocking vessels registered in those countries from U.S. ports;
- “Imposing visa restrictions including an increase in fees and processing, mandatory re-interview requirements and/or revisions of quotas for C-1/D maritime crew member visas;
- “Imposing commercial penalties stemming from U.S. government contracts including new commercial ships, liquified natural gas terminals and infrastructure, and/or other financial penalties on ships flagged under nations “in favor of the NZF;
- “Imposing additional port fees on ships owned, operated, or flagged by countries supporting the framework; and
- “Evaluating sanctions on officials sponsoring activist-driven climate policies that would burden American consumers, among other measures under consideration.”
“This will be the first time that a UN organization levies a global carbon tax on the world,” the statement declared. “The Administration unequivocally rejects this proposal before the IMO and will not tolerate any action that increases costs for our citizens, energy providers, shipping companies and their customers, or tourists. The economic impacts from this measure could be disastrous.”
The Trump administration had issued a similar, but less detailed, statement of opposition on August 12, arguing that the standards would “conveniently benefit China by requiring the use of expensive fuels unavailable at global scale. These standards would also preclude the use of proven technologies that fuel global shipping fleets, including lower emissions options where U.S. industry leads such as liquified natural gas (LNG) and biofuels.”
In comments submitted to the MEPC, the U.S. again argued that the proposed regulations irrationally penalized low-emission fossil fuels like LNG, as well as decrying the scheme’s excessive revenue accumulation in pursuit of ill-defined goals.
The U.S. is part of another unusual coalition in opposition to the regulations. The nations most opposed to the regulation are oil-producing countries, which includes many of America’s geopolitical adversaries. In the April vote, the 16 countries to oppose the regulations included Iran, Lebanon, Russia, Venezuela, and Yemen.
A coalition of six oil-producing nations submitted their own comment in opposition to the regulation, arguing that tax collection and the creation of a green energy fund is entirely outside of the scope of the MARPOL convention, and there is no prior precedent for a U.N. agency to require financial contributions for the non-compliance of private entities, rather than sovereign parties.
The final outcome remains unclear. The IMO usually operates based upon consensus, but the regulation vote may force it to a rare ballot vote, in which the resolution would need to carry a two-thirds majority to pass.
Thus, the regulation would require support by 72 out of the 108 member states who have ratified MARPOL Annex VI — but only if they all show up. At the April vote, only 79 nations had delegates present for the vote. Since 63 countries already voted for the regulation in April, the U.S. would either need a sizable majority of undecided countries to vote against, or it would need some countries to switch their votes. Reportedly, some countries are considering switching their votes, including Philippines, Turkey, Argentina, and Australia.
While the Trump administration threatens economic sanctions, Saudi Arabia is whipping its own votes against the measure with promises of economic opportunity and other sweeteners. Saudi Arabia may also have offered to pay the travel costs for representatives of countries not present in April, if they will vote against the measure. Such an energetic campaign suggest one thing: either way, the vote will be close.
Ironically, the U.N.’s International Maritime Organization appears poised to hold a rare vote of member countries on an issue without any popular buy-in at all. “Voters are showing their opposition to the net-zero climate agenda whenever they get the chance. But that isn’t stopping the United Nations,” wrote The Wall Street Journal editors. “Yes, this is the definition of taxation without representation. … It’s an attempt by climate-obsessed politicians to entrench their agenda before voters in democracies can kill it.”
American voters elected Donald Trump to stop exactly this sort of woke agenda at home. Can he carry enough countries along to stop it at the world stage?
AUTHOR
Joshua Arnold is a senior writer at The Washington Stand.
EDITORS NOTE: This Washington Stand column is republished with permission. All rights reserved. ©2025 Family Research Council.
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