Opinion: Unpacking The Shipping Global Carbon Tax Delay

A fragmented, multipolar approach to decarbonization might actually fit our fragmented, multipolar world better. By James Lightbourn — While there’s plenty of soul-searching underway among supporters of the world’s first proposed carbon tax, its one-year delay could ultimately lead to a more resilient decarbonization framework — and perhaps an acknowledgment that the International Maritime Organization (IMO) and, in turn, the United Nations (U.N.), might not be the right body to oversee such a measure.

To understand what happened, and where we go from here, we need to understand the rationale behind the American-led rebellion against the Net Zero Framework (NZF).

The reason behind the NZF outcome is simple: “money”. U.S. messaging around its opposition to the NZF focused on the potential cost to American consumers. But that argument rang hollow — especially since recently announced U.S. tariffs and fees on Chinese-built ships will likely have a similar effect.

However, the U.S.’ more compelling oppositional argument runs deeper and reflects waning confidence in the U.N. Even though it is headquartered in New York, only 32% of Americans believe it does a good job. Those figures are even worse amongst Republicans, 70% of whom believe the U.S. should decrease its funding of the U.N.

This is where the paradox starts to emerge.

The U.N. has an annual operating budget of $3.7 billion. The U.S. is the largest contributor to the U.N. and was assessed to be responsible for 22% of the regular budget, or $820 million in 2025. The Trump administration’s 2026 budget request seeks to withhold that contribution entirely.

The IMO, through the Net Zero Framework, is estimated to raise as much as $10 billion a year through carbon levies on the global shipping industry.

There would, no doubt, be tensions between a cash-strapped parent organization – the U.N. – and a cash-rich subsidiary – the IMO. This raises legitimate questions as to whether financial pressures could arise to such a level that IMO will feel compelled to divert funds collected under the NZF to cover shortfalls in the U.N. ‘s operating budget.

The U.N.’s financial situation (and the U.S.’ reluctance to fund it) aside, there was also the thorny question as to how the IMO would prudently allocate funds to support the decarbonization of the shipping sector without being heavy-handed in picking winners and losers amongst shipowners and fuel technologies.

With the NZF vote delayed, what is going to happen next? NZF supporters often argue that a global industry needs global regulation, and that without it we’ll face a patchwork of regional rules.

But is that really such a bad outcome?

The European Union — one of the NZF’s biggest proponents — has already gone its own way, adding shipping to the EU Emissions Trading System (ETS) and launching FuelEU Maritime. Brussels said that it would revisit those programs if the NZF passed, but never said exactly how. With the global plan now on hold, the EU framework remains intact. Similarly, African nations, led by Djibouti, have launched the African Sovereign Carbon Registry to collect fees from shipping companies based on their greenhouse gas emissions while calling their ports.

Other nations and regions are likely to follow suit. Yes, compliance will get more complex — but shipping companies already navigate a web of local regulations every time they arrive in port. Adding emissions requirements to that list won’t grind global trade to a halt.

Localized frameworks also ensure that the funds collected stay closer to the people and places most affected. Governments can decide how carbon revenues influence their own economies, export competitiveness, and consumer prices. And they can move faster — without waiting for consensus from 175 IMO member states.

We’re living in a fragmented, multipolar world. A fragmented, multipolar approach to decarbonization might actually fit it better. Relying on a global institution struggling with governance, enforcement, and credibility might never have been a winning strategy.

A fragmented landscape of regional frameworks — from the EU’s ETS to whatever U.S., Asian, or Middle Eastern mechanisms emerge next — may actually prove more effective. Fragmentation allows nations to tailor policies to their own economic interests, move faster, and direct revenues toward local decarbonization rather than funneling billions into a centralized U.N. fund with limited oversight.

A decentralized, market-driven race to decarbonize — grounded in competition, instead of consensus — may be the most realistic solution in today’s geopolitical environment and, in turn, do more for the planet than a one-size-fits-all U.N. framework ever could hope to achieve.