4th January 2025 – 10th January 2025
LOCAL NEWS
No news reported.
INTERNATIONAL NEWS
1. IMO GHG emissions pricing mechanism proposal backed by 47 nations
On the 9th January 2025, a group of 47 IMO member states (including all major Ship Registries and EU countries), the EU Commission and the International Chamber of Shipping (ICS) have submitted text to the IMO outlining a Global Greenhouse Gas (GHG) Emissions levy for shipping. It should be noted that China is not included in the list and seem to oppose the proposal.
The joint proposal to IMO for a maritime GHG emissions pricing mechanism can be found here.
The submission to the Working Group on Reduction of GHG Emissions from Ships (ISW-GHG) would see ships pay an annual levy per tonne of CO2-equivalent emissions into a fund to support the development and adoption of zero carbon fuels in shipping.
The new text sets out draft amendments to the IMO’s MARPOL annex VI that would require shipping companies operating vessels on international voyages to make an annual contribution, per tonne of CO2 equivalent emitted, to a new multi-billion-dollar ‘IMO GHG Strategy Implementation Fund.’ Revenue generated would be used to reward the production and uptake of zero/near-zero emission (ZNZ) marine fuels, whilst also providing billions of dollars annually to support the maritime GHG reduction efforts of developing countries.
The document will be considered at the 18th meeting of ISWG-GHG in February ahead of a critical meeting of the Marine Environment Protection Committee (MEPC 83) in April 2025 (in the week of 17 February 2025 at ISWG-GHG 18). During MEPC 82, due to significant opposition from a number of countries, MEPC decided to hold the intersessional working group sessions to accelerate the development of mid-term measures, including a potential global carbon levy and a global fuel standard, ahead of their planned approval at MEPC 83 in April 2025.
The aim of the GHG levy is to support the adoption of more expensive low carbon fuels in shipping by reducing the price gap to the cheaper, more polluting fossil fuels commonly used by ships. The text contains three sample values for the levy, $18.75, $100, and $150 per tonne of well-to-wake CO2 equivalent emissions.
Shipping nations among the proposal’s supporters include Greece, Japan, and Korea, the United Kingdom, and major flag states the Bahamas, Liberia, Marshall Islands, and Panama. All EU nations and the European Commission also support the text.
If the MARPOL amendments are approved by IMO in April 2025, they should enter into force globally in early 2027, with the collection of annual GHG contributions from ships commencing in 2028.
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ICS Shipping/FURTHER CONSIDERATION OF THE DEVELOPMENT OF THE BASKET OF
Seatrade Maritime 09/01 - IMO GHG Emissions Pricing Mechanism proposal backed-by 47 Nations
Safety4sea 09/01 - Nations issue joint submission to IMO for carbon levy
Bunkerspot 09/01 - GLOBAL: Joint GHG pricing proposal submitted to IMO by 47 countries and ICS
Marinelink 09/01 - Wide Agreement for Proposed GHG Emissions Pricing Mechanism
2. How the US-China maritime rivalry affects the shipping industry – US blacklists COSCO, plans to purchase Panama Canal
In the light of U.S. lawmakers unveiling a new act, dubbed “the SHIPS for America Act”, to secure its position in the industry, tackle the disparities, and enhance its competitiveness amid China’s growing influence, the US ‘blacklisted’ world’s largest shipowner and shipyard group.
COSCO Shipping and its subsidiaries Cosco Shipping (North America) and Cosco Shipping Finance were disclosed in a Federal Register filing on the 7th January 2025, where they were described as “Chinese military companies” providing commercial services or goods to support the People’s Liberation Army or related organizations. Media reports described this as a “blacklisting”, but the designation comes with no specific sanctions. Being on the list is, however, aimed at discouraging US firms from having dealings with the companies.
Fearnley Securities analysts Fredrik Dybwad and Nils Thommesen said: “As we are sure that markets remember the 2019 sanctions on Cosco and its effects on the tanker market, we believe the effect from this blacklisting will be of lower magnitude for crude and dry bulk. “However, it adds to pressure and should contribute positively on the marginal for freight rates.” The duo believes the move could have a larger effect on container shipping.
“This development underscores the reality that tensions between the two nations, particularly as Donald Trump prepares for a second presidential term, will likely become the new normal rather than an exception,” Wilson Wirawan, head of dry bulk research at BRS Shipbroker stated. “Shipping is just one of the many industries that will be affected, along with technology and other sectors," he added.. When it comes to the potential impact on the dry bulk market, Mr Wirawan noted that the geopolitical nature of the situation makes it difficult to predict whether the latest development will be a headwind or a tailwind. "Disruptions in trade are the physical manifestation of geopolitical tensions," he remarked.
Shifting focus to tankers, Nikolas Zannikos, shipping analyst at AXSMarine, noted that Cosco’s previous run-ins with the US—particularly in 2019, when the company was targeted over its involvement in transporting Iranian oil—led to significant rate increases. However, these rate hikes were temporary, with the market quickly readjusting. According to Mr Zannikos, the length of time the current blacklisting remains in effect will be crucial in determining its impact on the tanker market.
The recent sanctions on Chinese enterprises have brought to the surface another burning issue for the shipping industry as a whole: protectionism, i.e. government policies that restrict international trade to help domestic industries.
“Clearly, there is a lot of uncertainty related to the blacklisting, but it highlights scrutiny from the US towards shipping companies which could positively benefit fleets of other companies in the period ahead,” the analysts said.
The US has long ambitioned to spearhead the global maritime industry. However, compared to China-flagged vessels totaling over 5,500 units, only 80 US-flagged ships are engaged in international commerce. US-based shipyards have been unable to produce oceangoing vessels at scale and an increasing demand for qualified mariners has complicated the country’s position on the worldwide shipping stage.
The US-China rivalry, a story that spans multiple chapters, including a history of sanctions by the US government. The most recent US action, however, is considered as another potential escalation of the US-China tug of war, particularly in the face of the return to the White House of President-elect Donald Trump.
Trump’s victory in the US 2024 elections is seen by ocean and air freight rate benchmarking and market intelligence platform Xeneta as a “step in the wrong direction” for international trade as importers fear another spike in ocean container shipping freight rates.
President-elect Donald Trump has already caused concerns and generated speculation to the international community with his recent rhetoric on territorial ambitions in the Western Hemisphere—ranging from retaking the Panama Canal and buying Greenland to annexing Canada.
The incoming president’s remarks likely represent a calculated two-level game strategy: Internationally, Trump is looking to tackle rising canal transit fees while countering China’s expanding influence in the Western Hemisphere.
Trump’s recent comments on the Panama Canal’s transit fees and Chinese influence have thrust the canal to the forefront of US strategic discourse. Chinese companies such as Landbridge Group and the Hong Kong-based CK Hutchison Holdings now operate ports at both ends of the canal. This presence raises concerns about potential dual-use infrastructure and strategic maneuvering, particularly given China’s deepening ties to Latin America.
The United States wields significant economic leverage over Panama. As the primary user of the canal and Panama’s largest provider of foreign direct investment—$3.8 billion annually—the United States can influence Panamanian decision making. Conversely, the United States and its partners present few viable alternatives to Chinese investment in the region, a reality unlikely to change in the short term. Will Panama prioritize alignment with US interests to safeguard this support, or will it risk economic repercussions by favoring China and leveraging its control over this vital trade route?
According to experts, Washington cannot afford to overlook China’s growing influence, particularly given the canal’s strategic importance in the US-China competition—China ranks as its second-largest customer.
On the 9th January 2025, U.S. Representative Dusty Johnson (R-S.D.), a member of the Select Committee on China and the House Transportation and Infrastructure Committee, introduced the Panama Canal Repurchase Act, which would authorize the purchase of the Panama Canal, in line with President Trump’s strategy.
“President Trump is right to consider repurchasing the Panama Canal,” said Johnson. “China’s interest in and presence around the canal is a cause for concern. America must project strength abroad – owning and operating the Panama Canal might be an important step towards a stronger America and a more secure globe.”
According to some experts, Trump’s statements and strategy likely aim to pressure Panama on transit tariffs, caution Panama on increased reliance and cooperation with China, and project US resolve. To protect its interests without destabilizing the region, the United States must approach this situation with strategic foresight and diplomatic precision.
Related Articles:
Attachment 1: TradeWinds 07/01 - US ‘blacklists’ world’s largest shipowner and shipyard group in swipe at China
Dusty Johnson/press release 09/01 - /Johnson Introduces Bill to Repurchase Panama Canal
Rivieramm/07.01.2025/As US blacklists China's Cosco Shipping, analysts focus on trade impact
Maritime Executive 07/01 - China’s COSCO Shipping Listed by U.S. for Links to Chinese Military
The Loadstar 07/01 - Cosco share price falls after US lists carrier as a Chinese 'military asset'
Seatrade Maritime 07/01 - Cosco Shipping responds to US Chinese military companies listing
3. EU Set To Prepare 16th Sanctions Package Against Russia
Following the adoption of the 15th Sanctions Package against Russia, the European Union is preparing a significant update to its sanctions strategy against Russia, which is set for adoption by 24 February 2025, marking the third anniversary of its full-scale invasion of Ukraine.
Ursula von der Leyen, President of the European Commission, has said that the draft of the next package of sanctions against Russia is already being prepared. "Last week we adopted our 15th package of sanctions. It includes measures against Russia's shadow fleet and circumvention channels, and the 16th package is already in preparation.", Ms. Von der Leyen said.
The 16th sanctions package aims to send a "clear signal" to Moscow by addressing new sectors of Russia's economy that have not been adequately impacted by prior sanctions and targeting individuals and organisations.
While the EU's sanctions up until now have focused on energy, defense, and finance, the 16th package will broaden its scope. The EU plans to sanction those directly involved in the Russian regime's hybrid warfare tactics, including espionage activities and disinformation campaigns, particularly in countries like Germany. This will likely involve asset freezes, travel bans, and increased surveillance of Russia-linked individuals. However, the challenge remains in tracing and proving the involvement of such individuals in the ongoing hybrid attacks, making some measures difficult to implement immediately.
The package will also bring additional pressure on specific sectors of the Russian economy that have not yet felt the full effect of EU sanctions. The goal is to weaken Russia's economic foundation further while keeping up with the evolving tactics of hybrid warfare employed by the Russian state. The EU's commitment to supporting Ukraine remains at the heart of these sanctions, aligning economic measures with its broader geopolitical strategy to uphold international law and Ukraine's sovereignty.
As the anniversary of Russia's invasion approaches, the EU's 16th sanctions package highlights the EU's ongoing effort to isolate Russia economically and diplomatically.
Related Articles:
Pravda - EU is preparing 16th package of sanctions against Russia
Compliance MK 07/01 - EU Set to Prepare 16th Sanctions Package Against Russia
4. US TREASURY REPORT
The US Treasury Report for all actions reported is hereby attached.
Related Article:
Attachment 2:US Treasury Report for week 04/01/2025 – 10/01/2025
5. PIRACY REPORT
The Piracy Report for all actions reported is hereby attached.
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Attachment 3: Worldwide Threat to Shipping (WTS) Report, for the period between 04/12/2024 – 01/01/2025
Attachment 4: Worldwide Threat to Shipping (WTS) Report, for the period between 11/12/2024 – 08/01/2025
Nothing important to report from Local News, the House of Representatives and the ILO.