The US delegation's absence from the 83rd International Maritime Organisation's (IMO) Marine Environment Protection Committee (MEPC) meeting is unlikely to derail the outcome of discussions on a greenhouse gas (GHG) economic pricing mechanism, market participants told Argus.
This comes after the US sent a statement to foreign embassies of countries partaking in the IMO GHG economic pricing mechanism talks, confirming the US' absence from the negotiations. The statement says: "President Trump has made it clear that the US will not accept any international environmental agreement that unduly or unfairly burdens the US or the interests of the American people," according to a document seen by Argus. It adds: "Should such a blatantly unfair measure go forward, our government will consider reciprocal measures so as to offset any fees charged to US ships and compensate the American people for any other economic harm from any adopted GHG emissions measures". The statement ends: "The US will engage with partners on energy and investment issues of common interest. We stand ready to work with you to advance our shared commitment to energy security and economic growth".
"The US will not be engaging in negotiations at the IMO's 83rd Marine Environment Protection Committee. Consistent with President Trump's executive orders on international environmental agreements and on energy dominance, it is the administration's policy to put the interests of the US and the American people first in the development and negotiation of any international agreements", the US State Department told Argus.
IMO member countries are voting this week on the economic pricing mechanism for marine GHG emissions, for which the structure is expected to be agreed by 11 April, according to IMO secretary-general Arsenio Dominguez.
Even if the US does not engage in the GHG talks, it cannot unilaterally block decisions at the IMO, a spokesperson told Argus. Many of the GHG measures remain under discussion, with final approvals from the working group expected by 11 April.
"The US doesn't have a huge share of the global ocean-going fleet, so their absence or opposition probably won't change the broader [IMO members] consensus", a Chile-based ship owner told Argus. US imposing "reciprocal" costs on foreign ships calling at US ports will almost certainly get passed on to [US] consumers, which could lead to higher prices for goods in the US, the owner said.
If the measures are ratified by IMO member nations, US-flagged ships will probably not adhere to IMO's regulations when they call into ports of member countries, a Singapore-based shipbroker said. "We are not expecting any impacting on Asia-Pacific region yet, and it's subject to what is agreed at the MEPC and how levies are calculated," the shipbroker added.
Despite not having veto power, the US remains the largest financial contributor to the UN, a Greece-based shipowner told Argus. If international shipbuilding credit lines begin to tighten under US influence, other countries may align with Washington's stance, it added.
The IMO has 176 member countries. Greece, China and Japan account for the largest shares of the global ocean-going fleet.
During the ongoing session, member states have approved interim guidance on the carriage of biofuel blends. The guidance allows conventional bunker ships certified for carriage of oil fuels under Marpol Annex I to transport blends of not more than 30pc by volume of biofuel, as long as all residues or tank washings are discharged ashore, unless the oil discharge monitoring equipment is approved for the biofuel blends being shipped.
