TRUMP-induced news whiplash may have temporarily distracted the shipping industry from the looming climate crisis, but even tariff MAGAlomania can’t stave off the big decisions.

During the coming weeks governments will be forced to start showing their hands on shipping’s big climate negotiations. Whether to use a levy or a fuel standard, with or without carbon trading, to push the industry to net zero, is the big bet on the table.

Seasoned IMO watchers have a reasonably good idea where most governments stand on the options, but the nature of these negotiations means that the final hands are played close to the chest.

One of the big remaining questions is what the US plans to do.

It is no secret that the US is unlikely to be supporting a carbon levy, but their silence is worrying some into wondering whether they may be planning a more proactive opposition.

US representatives have been turning up to meetings in various climate forums only to read out a standard script that notes their “silence does not endorse or mean agreement to anything”.

The assumption is that US negotiating teams are yet to be handed a mandate from the US State Dept, but what that instruction will ultimately be, nobody yet knows.

The US only broke cover this week at the UN’s aviation equivalent forum to the IMO, ICAO, in order to block a recommendation on ‘sustainable’ aviation fuels.

While that intervention is likely a specific response to protect US agriculture, it has left many wondering whether previously unexpected interventions are yet to come for the maritime debate.

An anti-green stance from the US won’t be enough to derail IMO negotiations if it is a simple objection or passive disengagement. But the US can potentially make waves inside the IMO if it wants to.

In the absence of any immediate regulatory clarity, the industry has ploughed on regardless with a shift towards LNG as the most lucrative safe bet to sail through the immediate future. That decision is largely based on the EU approach effectively turning LNG-powered ships into compliance cash machines, at least in the short term, before the rules become stricter and erode LNG’s advantage in the mid-2030s.

Depending on which way the IMO debate goes, and whether previous outliers like a last-minute US disruption emerges, those LNG bets may be revised.

Either way we are fast approaching the point at which we should start to see some commercial clarity, or at least get a better idea which of the hedge bets already made are going to pay out.

What is less clear is whether the decisions being made will ultimately cut shipping emissions.

Richard Meade
Editor-in-chief, Lloyd’s List

Click here to view the latest Lloyd’s List Daily Briefing