- US Pressure Campaign Derails IMO Decarbonisation Deal.
- Fragmented Europe Outplayed by US and Saudi Delegations.
- Shipping Faces New Age of Geopolitical Power Struggles.
The blame game happening in Europe over the faltering consensus on shipping’s decarbonisation is turning into a frustrating distraction. While Greece and Cyprus probably won’t face any infringement cases for sitting out the vote that postponed the Net-Zero Framework, there could still be some fallout. The divide between Athens and Copenhagen on maritime climate policy is still wide, and tensions are rising among officials and industry leaders, reports Lloyd’s List.
US Pressure Derails Global Net-Zero Framework
The US, backed by oil-rich nations, managed to derail what Donald Trump called the “Global Green Scan Tax on Shipping.” By threatening sanctions, visa restrictions, and port fees, Washington pressured countries, companies, and associations to withdraw their support for the IMO’s Net-Zero Framework. These “direct threats did the job,” causing many shipping leaders to hold back their opinions out of fear of backlash. Just last week, at least one major climate initiative based in Washington was scrapped due to worries about being seen as “too green” by US agencies. The aggressive tactics left seasoned IMO veterans stunned, with European delegates feeling “shellshocked” and struggling to regain their footing.
Fragmented Europe Outplayed in IMO Negotiations
Despite the outcry over unfair tactics, the US and Saudi delegations simply outperformed their European rivals. The American negotiators came in with a better grasp of IMO rules and executed a more effective game plan. The outcome? Europe looked divided and unprepared. The collapse of the Net-Zero Framework isn’t just a setback for carbon pricing; it marks a shift in global power dynamics. We’re seeing a return to politics driven by national interests, with larger nations overshadowing smaller ones, which is reshaping the maritime sector’s traditional stance of staying out of political disputes.
Shipping Caught in New Geopolitical Currents
Shipping is currently navigating some pretty choppy waters, where picking sides might soon be unavoidable. Boardrooms that once zeroed in on supply and demand are now having to consider geopolitical strategies as well. At the recent Global Maritime Forum, shipping discussions were surprisingly scarce, highlighting how geopolitics has taken the front seat over traditional market influences.
Executives are increasingly weighing geopolitical risks as trade wars, sanctions, and regional conflicts reshape the landscape of global trade. The industry is finding it tough to make sense of the new geopolitical dynamics that are directly impacting its operations.
Trade is Becoming More Expensive and Fragmented
The fallout from the IMO standoff underscores a larger issue: geopolitical changes are driving up the costs and inefficiencies of global trade. The ongoing tensions between US President Donald Trump and Chinese leader Xi Jinping are adding to these complications. Sanctions have already pushed 20% of the tanker fleet into a shadow trade system, with shipping routes now determined by political alliances rather than market logic.
As globalisation shifts, “supply routes are mapped not only for distance and cost, but for political alignment.” The weaponisation of shipping puts companies in precarious positions, forcing them to constantly adapt to new political realities.
Globalisation is Evolving — Not Disappearing
Despite the chaos, the shipping industry is showing remarkable resilience. Trade volumes haven’t plummeted; they’ve merely “plateaued and rerouted.” Supply chains have become shorter and more diverse instead of vanishing altogether. Capital is still flowing, but it’s now “more selective and politically conditioned.”
Who “won” or “lost” in the IMO debate is less important than how shipping companies decide to position themselves in this new world order. The global economy, while becoming more fragmented, remains deeply interconnected, and shipping must now evolve to thrive in this newly shaped geopolitical environment.
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Source: Lloyd’s List
