DONALD Trump’s extraordinary return to the White House brings with it a likely US retreat from global climate diplomacy and a promised reversal of the sweeping industrial policies implemented under Joe Biden that sought to subsidise an ambitious decarbonisation of the economy.

The immediate threat of shipping-specific climate regulation being derailed within the International Maritime Organization as a result of a second climate-sceptic Trump term in office, is limited. However, an isolationist, or potentially adversarial US stance on global climate negotiations is likely to create unwelcome headwinds for investment into green fuels production.

Global climate leaders have been bracing for the possibility of a US U-turn on climate policy for months, having learnt a lesson from their first experience with Trump. Even so, confirmation of a Trump victory on Wednesday will cast a long shadow over the UN COP29 summit scheduled to start on Monday in Azerbaijan.

With world leaders from important economies including the US, the EU and Brazil planning to skip this year’s climate change summit, the talks were already under pressure.

The headline agenda item for this year is whether countries can agree a new climate finance goal, aimed at helping developing countries create green energy systems and adapt to a warming world.

While shipping was not directly linked to those discussions there are multiple non-state negotiations happening as part of the COP process that will directly inform progress both at the IMO and influence funding mechanisms to spur green fuel production.

The US election result does little to alter that agenda, but the general consensus from climate diplomats is that it makes those negotiations more important but harder.

Former President Trump has promised to take the US out of the Paris climate agreement — as he did briefly during his first term in office. An exit from the UN Framework Convention on Climate Change is also possible, albeit legally more complicated.

The more immediate action, however, will likely focus on whether Trump will be able to make good on his campaign pledges to unpick the trio of domestic US laws — the CHIPS and Science Act, the Bipartisan Infrastructure Law and especially the Inflation Reduction Act.

Consultants at Wood Mackenzie had previously estimated that a Trump presidency would reduce investment in America’s energy transition by $1trn by 2050, to roughly $6trn. Kept in place, Goldman Sachs forecast the IRA alone will generate more than $3trn in public and private investment in clean technologies by 2030.

For shipping specifically, the pivotal question of what the IMO can agree next year in terms of technical and economic measures to deliver the global 2050 net zero targets for emissions reductions, remains largely “Trump-proofed” for now.

The US was a key player in driving a more ambitious emissions reduction target for shipping, but even under Biden they had been opposed to any form of carbon levy and had fallen into the camp of countries deemed to be ‘unhelpful’ in pushing for an equitable transition on climate finance discussions.

The IMO process does not hinge on who sits in the White House, indeed Trump’s first term in the office did little to disrupt the IMO process.

A US exodus from climate negotiations over the next four years would do little to disrupt the existing majority of countries within the IMO committed to delivering an ambitious carbon levy and a strong fuel standard in 2025.

The departure of the world’s second-biggest greenhouse gas emitter could, however, cause a shift in the power dynamics of climate leadership.

Many of the climate diplomats engaged within the UNFCCC process have suggested that China may be prompted into taking a more prominent leadership role. A US exit is also likely to strengthen the resolve of other countries to bolster the multilateral process knowing that the US can no longer be relied upon to catalyst green investment alone.

As the ongoing discussions at the hearings of the European Commissioners-designate rumble on in Brussels, attention is now turning to what the EU can do to fill the void.

A coalition of European business interests including European shipowners will tomorrow stress to the new commission the urgent need to derisk investment in renewable and low-carbon fuels.

The Clean Maritime Fuels Platform will ask the commission to launch dedicated sectoral calls under the EU Innovation Fund for the first deployment of decarbonisation solutions. The €20m EU ETS allowances allocated to the decarbonisation of the maritime sector until 2030 should be used as soon as possible, they will explain.

As for the US, shipping negotiators heading to Baku this weekend remain sanguine regarding the prospects of any immediate threat to shipping’s climate trajectory as a result of the US election.

“The US has always been a difficult when it comes to climate,” explained one.

“And within the IMO they're already priced in as unhelpful. It’s disappointing but it doesn’t fundamentally change anything for the moment.”

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