Trump's Opposition Fails to Derail Global Shipping Carbon Tax Plan

Ninety percent of global trade relies on giant ships that transport goods worldwide, including jet fuel, electronics, and clothing. While this seafaring trade has significantly reduced product costs, it has historically depended on highly polluting fuel—essentially the leftover sludge from crude oil refining. This reliance has made the shipping sector responsible for approximately 3% of total global carbon emissions.

Last year, the International Maritime Organization (IMO), the UN agency regulating global shipping, was set to adopt a plan to eliminate these emissions entirely. However, the Trump administration intervened, threatening countries with visa restrictions, tariffs, and port fees if they supported the initiative. As a result, the ambitious Net-Zero Framework (NZF)—which proposed a per-ton fee on greenhouse gas emissions exceeding a certain threshold—has faced significant delays.

Weaker alternative proposals, which excluded the core functions of the NZF, gained some traction, threatening climate progress in the sector. However, at a recent meeting of UN member countries in London, these diluted proposals received little support. Instead, a slim majority of countries voiced strong backing for the original NZF, leaving a narrow path for its adoption.

“A genuine spirit of collaboration and optimism pervaded the negotiations. There were people who did not want to see progress, but a vast majority of delegates in the room were working together.”

— Em Fenton, Senior Director at Opportunity Green

The Trump administration opposes the NZF, arguing it would unfairly burden American consumers and businesses. In official documents submitted to the IMO, the U.S. firmly rejected penalizing carbon-intensive fuels or including economic measures like taxes or levies in the framework. The administration stated:

“The United States submits that the most appropriate path forward is to end consideration of the IMO Net-Zero Framework entirely.”

Despite opposition from countries like Japan, Liberia, Argentina, and Panama, supporters of the original NZF maintained momentum. However, the path to adoption remains uncertain. Opponents can still derail the plan by securing support from one-third of member countries or a smaller group controlling half of the world’s shipping tonnage, as per IMO rules.

Notably, just four countries—Liberia, Panama, the Bahamas, and the Marshall Islands—account for roughly half of the world’s registered ships. This is due to a practice where ships are owned, operated, and registered in different countries, similar to offshore banking for tax purposes.