The Daily View: So now what?

INSTEAD of a clear win or loss, the IMO’s carbon price for shipping finds itself in something like purgatory.

Maybe the US’ bullying over the Net-Zero Framework would have killed the plan outright, if one of the two alternative votes called on Friday had happened instead.

Approval by the wildcard ‘explicit acceptance’ procedure would almost certainly have killed the plan, and possibly the entire IMO along with it.

But I don’t think supporters would have called for a vote on the NZF (as Brazil did) on Friday if they didn’t think they could win it. Would China and Singapore have voted against the same framework they voted to approve six months ago? Delaying a big decision is easier than making one, after all.

On the other hand, those in favour might have preferred a swift death for the NZF, instead of the slow one to which many now think it is condemned.

There will be some winners from the failure of the climate push. Owners of rust-bucket tonnage can run it for longer. Those with big investments in LNG-fuelled ships will probably be relieved at the tax holiday this represents for them.

The Union of Greek Shipowners and Intertanko have welcomed the chance for more negotiating time.

But will that extra time mean better policy? I don’t think so. It will be a long time before the IMO policy machine can come up with a replacement framework. Any replacement that looks like a Big Green Scam Tax will meet the same fate as the NZF, once Potus gets wind of it.

The IMO can’t make substantial changes to the NZF until the MEPC session resumes next year. Any major changes will have to be agreed by consensus or voted through, and the parties then given six months to digest them before coming back to adoption.

That means more regional taxation is on the cards. Each country or region without its own maritime emissions tax may soon find itself at a competitive disadvantage to those that do.

That means shipping loses, the developing world loses, green technology loses and everyone gets more paperwork to do.

Declan Bush
Senior reporter, Lloyd’s List

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