US and Saudi Arabia derail landmark shipping carbon-tax — what it means

Negotiations on a landmark global carbon-tax for shipping were effectively derailed after representatives from the US and Saudi Arabia backed a motion to adjourn talks for a year. The measure — which had been set to make shipping the first industry with internationally mandated emissions rules — will now require timelines and terms to be renegotiated.

The plan, the product of nearly a decade of talks and support from more than 100 countries, would have forced ship owners to switch to cleaner fuels from 2028 or face fines. Industry groups welcomed the clarity the deal promised, but the adjournment leaves major questions about enforcement, investment timelines and emissions trajectories.

Key points:

• The US reportedly pressured countries to vote against the measure, threatening tariffs, port restrictions and visa limits; the US government also voted in favor of the adjournment motion.
• Saudi Arabia tabled the motion to delay the vote, which passed by a narrow margin after backing from several countries.
• The International Chamber of Shipping said it was “disappointed” member states could not agree a way forward; the industry said it needs predictable, global rules to justify cleaner-fuel investments.
• Shipping currently accounts for roughly 3% of global CO2 emissions and is projected to grow significantly by 2050 if unregulated.

Background and context: Carbon dioxide concentrations hit record highs in 2024, increasing the urgency of emissions cuts across sectors. The proposed shipping agreement would have provided a uniform international standard, avoiding a patchwork of national rules that can complicate shipping operations and investment decisions.

Next steps: Delegates are expected to reconvene in April, but reports indicate that meeting may focus on renegotiation rather than a final vote — meaning the original timelines and the 2028 compliance date are now uncertain.

For more reading: Engadget coverage of the MEPC outcome (includes links to industry statements) and the International Chamber of Shipping for industry reactions.

Discussion: With the plan delayed, what should governments and the shipping industry prioritize next to keep emissions targets on track?