The Trump administration is drafting a diplomatic memo that would warn countries against adopting a carbon tax on shipping pollution and other climate measures, escalating its high-profile efforts to subvert international action on global warming.
The State Department cable, reviewed by POLITICO’s E&E News, says the U.S. is “strongly opposed” to a fee on ships’ climate pollution, and “will not tolerate” the creation of a fund that uses carbon revenue for programs aimed at lowering the industry’s emissions.
It’s the latest twist in a yearslong saga by the U.N. International Maritime Organization to curb emissions from shipping, which accounts for roughly 3 percent of global climate pollution. Negotiators from dozens of countries were poised to vote on the carbon tax last fall, until it was derailed when the Trump administration threatened to slap tariffs on nations that supported it.
The vote was delayed for a year, after which two of President Donald Trump’s Cabinet secretaries described the attempt to block the tax as an “all hands on deck” effort. Now administration officials are trying to kill the measure permanently. They’re also taking aim at other initiatives that are linked to the tax in a package called the Net-Zero Framework, or NZF.
“The most appropriate path forward is to end consideration of the NZF prior to moving to a new discussion,” says the draft cable, which was written by the State Department in coordination with the Department of Energy and other agencies, according to a person who was granted anonymity to discuss internal deliberations. It’s expected to be sent to member nations of the IMO’s Marine Environment Protection Committee before its next meeting April 27.
The administration’s expanding demands have raised the profile of a specialized U.N. agency that regulates the shipping industry, with an emblem featuring two anchors. The IMO has become one of the administration’s favorite targets as the president tries to buckle the knees of international action on climate change. Delaying the carbon tax vote in October marked a clear victory in the White House’s efforts to undermine steps toward addressing rising temperatures.
A State Department spokesperson declined to comment on diplomatic discussions but acknowledged that the administration is strongly opposed to the IMO proposal.
“We will fight hard to protect the American people and their economic interests,” the spokesperson said.
The Department of Energy did not respond to a request for comment. The White House declined to comment.
The cable — known as a demarche — indicates that it will be accompanied by a related document from the State Department outlining the U.S. position opposing any alternatives to the NZF that rely on “rigid mandates and economic burdens.” Such plans must not include a “financial penalty, carbon tax or multilateral fund,” says the document, also reviewed by E&E News.
It demands that the IMO not set an “arbitrary target” to “reverse-engineer compliance.” It appears that the administration was referring to the IMO’s 2023 emission reduction strategy, which includes a goal of net zero by 2050, something Energy Secretary Chris Wright has called “a crazy bad idea.”
Earlier this month, at a shipping summit in Greece, Marco Sylvester, deputy assistant secretary of State for transportation affairs, urged the IMO to kill what he referred to as the Net “Zombie” Framework, according to reporting by Lloyd’s List.
The NZF, a draft of which countries approved last April, would incentivize the use of cleaner shipping fuels in a bid to zero out the industry’s climate pollution by 2050.
The framework would have set a carbon-intensity standard that would become stricter over time, encouraging industry to switch from fossil fuels to lower-emission alternatives. Ships that don’t meet the standard would need to pay a fee, which would help fund the shift to greener fuels and support developing countries.
After thwarting the October vote, Secretary of State Marco Rubio wrote in a Wall Street Journal op-ed that “should this initiative or any other similar one emerge from the U.N. bureaucracy again, our coalition against it will be ready — and larger.”
The U.S. position paper, which could still change, according to the person who’s familiar with the internal deliberations, also calls on the IMO to eliminate penalties on liquefied natural gas, and not place limits or penalties on fuel types. The IMO framework would not ban LNG or biofuels, but ships that run purely on LNG would eventually have to pay a penalty.
“Rather than pursuing a global emissions scheme that would restrict energy types, the IMO should look to create an environment of energy abundance,” the document says.
It also argues that regional initiatives to reduce shipping pollution, such as the European Union’s Emissions Trading System, which covers carbon pollution from large ships, would have to be terminated.
That could prove challenging for the EU, which could only amend how its emissions trading system addresses shipping if a future IMO measure matches or exceeds the strength of the EU system, according to Agathe Peigney, a shipping policy officer at Transport and Environment, a European group that advocates for clean transportation. The EU stressed its commitment to zeroing out shipping emissions after the carbon tax was delayed.
Some countries are considering other approaches. An alternative proposal submitted to the IMO by Liberia calls for no direct carbon fee and says emissions reductions should be judged against “market uptake of low-carbon marine fuels.”
That’s significant because it would mean basing a fuel transition on what is available in the market, rather than relying on incentives for fuel switching. Liberia argued in its paper, dated Feb. 20 and reviewed by E&E News, that the fuel standard in the current proposal is “overly restrictive” and reduces operators’ flexibility.
Its proposal is co-sponsored by Argentina and Panama. Both Panama and Liberia are major registries for ships and voted with the U.S. to delay the NZF.
“This appears crafted to ensure no one can plausibly call it a ‘carbon tax,’ and while it likely succeeds on that front, it does so by stripping out most of the framework’s original demand-creation logic,” said Evelyne Williams, a former State Department negotiator. “Even in this attenuated form, I doubt it will satisfy an administration predisposed to reject anything climate-oriented on principle.”
A separate February submission from Brazil argues for retaining the NZF, which it says is “sound and realistic” and intended to “minimize its impacts on people’s lives.” The framework, it added, was not “created in haste, nor imposed by any single party.”
The IMO has worked with countries since 2023 to find agreement on the NZF.
Last month, the IMO’s secretary-general, Arsenio Dominguez, told reporters that the U.S. was in part concerned about the proposed fund to disburse money raised via the carbon tax. He left open the possibility of getting rid of it as part of a compromise.
Industry analysts and climate advocates say the framework could avoid creating a patchwork of regulations that increase costs and uncertainty for the shipping industry.
James Lightbourn, founder of Cavalier Shipping, a maritime industry consultancy, said there were legitimate questions about how a U.N. body would collect the fee on emissions.
But he added that uncertainty around the regulation slows down the implementation of incentives that could encourage shipping companies to order new vessels that would be in operation for decades.
