SPAIN and Italy are set to join Greece, Cyprus and Malta in siding with the US against the IMO Net-Zero Framework. There are a few different ways to respond to this.

The first: Who cares? US president Donald Trump has already torpedoed any chances of a global carbon pricing passing into law. Greece, Cyprus et al can say what they like about it; it’s doomed.

That may be true. We don’t actually know how many of the 63 countries that voted in favour of the NZF last April would still support it, were it not for the risk of enraging a US administration determined to scuttle the plan.

But Europe is a significant voting bloc at IMO, and its decisions will help shape whatever the latter comes up with next.

It may go for a FuelEU-style regulation, our lead scoop today reveals.

This would do little for the planet, but shipowners could probably live with it. It would mean anyone with access to LNG carriers has a short-lived compliance goldmine to exploit.

It’s not clear the US would accept any compromise. But the more constructive tone from US diplomats at the recent Capital Link in Athens suggests the possibility of a deal to be made.

Remember that Greece wants to import US LNG, and many of its biggest shipowners are heavily invested in dual-fuel LNG ships. Remember that the US’ main concern here is “energy dominance”.

The US has a flood of LNG export capacity, and faces falling demand in Asia and Europe. It needs customers for that gas.

Yet LNG is an expensive and dirty form of energy to import. Trump’s tariff wars are not going to stoke great desire among Europeans for more dependency on US energy.

A toothless IMO regulation is also a good reason for the EU to keep its ETS, which raises plenty of money that will be hard for European governments to give up. Do all these European governments really want that to go away..?

Stay tuned for more.

Declan Bush
Senior reporter, Lloyd’s List

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