The United States has used an intervention at this week's IMO greenhouse gas talks in London to set out the alternatives it could accept in place of an IMO-administered fund, while restating its "redline" opposition to the fund itself. Among the options it is open to exploring is a temporary "facility" that could be more streamlined and agile than a fund.

The delegation made the comments during discussion of the fund question at the 22nd session of the Intersessional Working Group on Reduction of GHG Emissions from Ships (ISWG-GHG 22), sources at the IMO gathering told Ship & Bunker. The working group meets ahead of the resumed session at which member states are due to return to the question of adopting the Net-Zero Framework (NZF), which was approved at the Marine Environment Protection Committee (MEPC) 83 in April 2025 but left unadopted after an extraordinary session adjourned last October. The NZF, as approved, would make shipping the first industry subject to a global greenhouse gas pricing mechanism, so how the revenue question is resolved is central to whether the framework can enter into force.

"Redline" Opposition Restated

"Please forgive me for briefly restating our principled, firm, and, yes, redline opposition to any IMO-administered fund," the US delegation said. "Standing up and operating an IMO fund, and allocating billions of dollars or more a year from that fund for decades, would be a massive departure from the longtime mission and competence of the IMO."

The delegation said its more fundamental objection was that "an IMO-run fund, whose source of funding would ultimately be consumers worldwide, those who would pay the de facto carbon tax under the NZF proposal, is not an acceptable way forward for the United States."

However, the intervention was framed around the argument that the IMO's 2023 GHG strategy never called for a fund, with the delegation arguing that "the fund was never an end goal in and of itself" but a means of delivering the just and equitable transition the strategy envisions — a point it said Brazil and Denmark had also made. That 2023 strategy set the sector's headline goals of reaching net-zero GHG emissions from international shipping by or around 2050, with interim checkpoints in 2030 and 2040.

Alternatives on the Table

On that basis, the US listed approaches it is open to considering: public-private partnerships, citing proposals from Japan; voluntary industry or government support for merit-based projects; and direct contributions to existing IMO programmes — provided none are created by amendments to MARPOL Annex VI.

The delegation also welcomed Brazil's proposal to explore a "facility" that would differ institutionally and operationally from a fund.

"A facility could be temporary and could be designed as a more streamlined and agile mechanism, focused on the efficient collection and deployment of revenues through accredited implementing institutions," it said. A "roster of funds" concept previously put forward by Canada could also be explored, the delegation said.

While stressing it was not endorsing any of the ideas at this meeting, the US committed to taking them back to Washington and to "working constructively with proponents and interested others in the intersessional period on further exploration of these ideas, and any other practical proposals that are not an IMO-administered fund of any kind and that are not built on revenues from a global carbon tax."

The delegation also argued the alternatives would be faster to establish, saying a fund handling more money for environmental projects than the World Bank or the Global Environment Facility would take "years and years, even in a best-case scenario" to stand up, while existing channels of public and private investment, assistance, and technical cooperation are already proven.

How revenue is deployed matters beyond the US: developing states have argued that support for training, technology transfer, and infrastructure is essential for a "just and equitable" transition, since many fear the costs of compliance and new fuels could fall hardest on countries least able to afford them.

Positions on Green Fuel Rewards

On rewards for green fuels, the US said no dedicated reward mechanism would be needed if a more gradual Global Fuel Intensity (GFI) reduction trajectory were adopted, with the sale of surplus credits the sole reward under a voluntary market-based approach.

That position stands at odds with the significant rewards for zero and near-zero fuels that ICS and IBIA have called for, which would be paid from the very fund the US opposes.

Any multiplier mechanism, the delegation added, "must apply to the broadest possible range of fuels and technologies achieving verified GHG reductions consistent with an energy-all approach, not only those meeting an arbitrary intensity threshold."

The comments give the clearest picture yet of what Washington could accept in a compromise on the IMO's Net-Zero Framework. With the resumed MEPC session approaching, member states will now be weighing whether any of these alternatives — a facility, public-private partnerships, or a roster of funds — can bridge the gap between the US position and those supporting an IMO-administered fund.

Source: Ship & Bunker