Pushback against IMO carbon tax plans grows

ABS chairman and CEO Christopher J. Wiernicki: “TIMO needs to take a timeout."

Opposition to efforts at IMO to impose what is effectively a global carbon tax on shipping through its net zero framework are growing, with classification society ABS Chairman and CEO Christopher J. Wiernicki today saying that “shipping and the IMO are on different trajectories”

The proposals for the carbon tax (though that’s a term its supporters hate) were approved by the Marine Environment Protection Committee during its 83rd session (MEPC 83) from April 7–11 April 2025, the measures include a new fuel standard for ships and a global pricing mechanism for emissions.

The MEPC meeting was unusually contentious for an IMO proceeding with the U.S. delegation withdrawing before it concluded and circulating a diplomatic note that reportedly saying, among other things, that “the U.S. rejects any and all efforts to impose economic efforts against its ships based on GHG emissions or fuel choice.”

Since then the U.S, Secretary of State Marco Rubio, Secretary of Commerce Howard Lutnick, Secretary of Energy Chris Wright, and Secretary of Transportation Sean Duffy. have issued a joint statement that said:

“Whatever its stated goals, the proposed framework is effectively a global carbon tax on Americans levied by an unaccountable UN organization. These fuel 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. Under this framework, ships will have to pay fees for failing to meet unattainable fuel standards and emissions targets. These fees will drive up energy and transportation and leisure cruise costs. Even small vessels would incur millions of dollars in fees, directly driving up costs for American consumers.

“The Trump 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. We will fight hard to protect the American people and their economic interests. Our fellow IMO members should be on notice that we will look for their support against this action and not hesitate to retaliate or explore remedies for our citizens should this endeavor fail.”

Today ABS Chairman and CEO Christopher J. Wiernicki said:

“Shipping and the IMO are on different trajectories. There is no clear pathway for green fuel availability and scalability and infrastructure support. LNG and biofuels are mission critical to any success and should not be overlooked, over penalized or discarded in the Net Zero regulation. Quite frankly, achieving net zero for shipping by 2050 looks like a wildcard.”

Wiernicki made his remarks at the launch of the 2025 ABS Sustainability Outlook, Beyond the Horizon: Vision Meets Reality.

IMO NEEDS TO TAKE A TIMEOUT

“The industry needs a framework but we need one that marries ambition with reality,” added Wiernicki. “The mechanics need to be thought through. Right now, we are not where we need to be. Emissions remain 121% above the 2008 baseline, compliance costs are compounding, and the signals shaping investment – regulation, fuel pricing, penalties, availability, scalability – are moving at different speeds. The IMO needs to take a timeout. We need to get this right.”

Launched at the ABS Sustainability Summit during London International Shipping Week, the seventh edition of the annual industry leading report shows that, despite progress on carbon intensity, shipping’s absolute emissions continue to climb.

“Maritime decarbonization is a three-part calculus: 70 percent fuel selection, 15 percent energy efficiency, and 15 percent performance optimization. That 30 percent beyond fuel is where software plays a pivotal role and, given the current scarcity of green and blue fuel variants globally, is where the most immediate and scalable gains can be achieved,” Wiernicki said. “Getting closer to the 2030s, we need to protect the bridge, which is LNG with methane-slip controls and credible bio-/e-LNG pathways, to extend the runway, which is energy efficiency technologies and onboard carbon capture, to cut well to wake emissions and prepare the endgame: nuclear and zero carbon fuels when they are safe, insurable and investible at scale.”

The report also highlights the sharply increasing cost of compliance, modelling how a typical vessel trading within the EU could see daily operating costs increase from approximately $15,000 in 2028 to around $45,000 by 2035. Meanwhile, LNG is over-penalized in the early 2030s although it underpins blue fuels, keeps hard-to-abate segments compliant, and buys time for zero-carbon fuels, provided methane slip is addressed and pathways to bio-/e-LNG are opened.

The Outlook, a compilation of ABS research and advanced analysis of progress with respect to sustainability challenges at sea and the readiness of the various solutions, highlights both the important bridging role of energy efficiency technologies and an impending retrofit capacity crunch at shipyards. Finally, the Outlook acknowledges the game-changing potential of nuclear propulsion technology beyond 2035.

• A copy of the 2025 ABS Sustainability Outlook, Beyond the Horizon: Vision Meets Reality is available for download HERE.