IMO Headquarters, London. File Image. Image Credit: Ship & Bunker.

• US sets out fund alternatives it could accept at ISWG-GHG 22
• "Redline" opposition to any IMO-administered fund restated
• Brazil's temporary "facility" concept among ideas the US is open to exploring
• Fund of NZF scale would take "years and years" to stand up, delegation argues

The US has used an intervention at this week's IMO greenhouse gas talks in London to set out the alternatives it could accept to an IMO-administered fund, while restating its redline against the fund itself.

They include 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 Marine Environment Protection Committee (MEPC) 83 in April 2025 but left unadopted after an extraordinary session adjourned last October.

"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."

But the intervention was framed around the argument that the IMO's 2023 GHG strategy never called for a fund, with the delegation arguing "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.

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, 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.

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."