The shipping sector’s first binding emissions targets were agreed on Friday 11 April, making it the first industry with internationally mandated targets of this kind. While considered a landmark deal, some observers say improvements are needed to the declared targets if the maritime sector is to reach net zero by 2050.
The deal – agreed during a meeting of the UN International Maritime Organization (IMO) Marine Environment Protection Committee – received endorsement from 63 countries, including China, Brazil, South Africa and several European states.
China eventually reached a compromise but had earlier opposed “overly ambitious” climate goals and a global carbon levy, citing the potential for disproportionate impacts on developing nations.
Sixteen countries opposed the deal, notably the US, citing unfairnesses and the fact that the US would end up paying more than other nations. There were also concerns that such a deal could might set a precedent that allowed non-IMO regional blocs (like the EU) to impose similar carbon pricing unilaterally, undermining US sovereignty in trade and shipping regulation.
Saudi Arabia also opposed the final deal, having taken a similar stance to China and Brazil on the propensity for a global carbon levy to exact a disproportionate toll on developing nations, but refusing to reach a compromise. The Saudi delegation also voiced doubts about the maturity of technologies like e-fuels and onboard carbon capture, viewed as indispensable for meeting the proposed targets.
A long-standing policy vaccuum?
Shipping accounts for nearly 3% of total global CO2 emissions, according to recent IMO figures,1 and amongst sectors that contribute most to the overall tally, it ranks somewhere in the top 8 (i.e., below energy, land transport, and heavy industry, but above waste).
A 2023 global climate strategy for the sector had set out an ambition to achieve a 30% reduction in GHG emissions by 2030, and 80% by 2040, which is “close to a level of ambition that can deliver on the Paris climate agreement”, according to a recent comment by academic experts,2 but the obvious outstanding item has been policies to ensure these targets are met.
The new agreement sets “indicative checkpoints” to reduce total annual GHG emissions from international shipping by at least 20%, striving for 30%, by 2030, and at least 70%, striving for 80%, by 2040, compared to 2008 levels.
As well as these absolute reductions, the new agreement also defines a global fuel standard that sets GHG intensity reduction targets for each year from 2027 to 2035. This is intended to push the industry towards putative low- or zero-carbon fuels such as e-ammonia and e-methanol.
Another key ingredient of the new framework is the introduction of financial penalties. From 2027, ships exceeding certain emission thresholds will incur penalties, including a $100 fee per ton of emissions above certain limits. This scheme is expected to generate up to $13 billion annually, intended to support the transition to cleaner shipping technologies and assist developing nations.
Revenues generated by the penalties will be used to fund a reward mechanism for zero- and near-zero emission fuels and can potentially support a just and equitable transition, said the Global Maritime Forum, a not-for-profit organization headquartered in Copenhagen.
The agreement also enshrines a carbon trading system that it is hoped will allow shipping firms to buy and sell emission credits, incentivizing cleaner technologies and operational efficiency.
Overall, the Global Maritime Forum said the new targets were “laudable, but not enough to drive needed investments.”
Against the current backdrop of geopolitical tensions and unprecedented disruption of global trade, the forum praised the efforts as “an example of multilateralism still at work.”
Jesse Fahnestock, the group’s Director of Decarbonisation, commented: “While the targets are a step forward, they will need to be improved if they are to drive the rapid fuel shift that will enable the maritime sector to reach net zero by 2050. While we applaud the progress made, meeting the targets will require immediate and decisive investments in green fuel technology and infrastructure. The IMO will have opportunities to make these regulations more impactful over time, and national and regional policies also need to prioritise scalable e-fuels and the infrastructure needed for long-term decarbonisation.”
The group said it believed the agreed measures may not be strong enough on their own to deliver on the IMO’s strategy. “The GHG intensity targets create uncertainty as to whether the strategy’s emissions reduction checkpoints for 2030 and 2040 will be met. As currently designed, measures are unlikely to be sufficient to incentivise the rapid development of e-fuels such as e-ammonia or e-methanol, which will be needed in the long run due to their scalability and emission reduction potential. A failure to begin investing in these fuels now would put the target of at least 5% zero- and near-zero emission fuel use by 2030 and the industry’s entire 2050 net-zero goal at risk.”
“A lot of work remains to be done. There will be opportunities to strengthen the GHG intensity targets and penalties via future reviews. In addition, crucial details about the implementation of the measures will need to be developed between now and their entry into force in 2028. These include guidelines on the revenue disbursement and life cycle emission factors of fuels that will affect which fuels and vessels can receive financial support, and which fuels are capable of meeting the targets in the short run.”
“As the measures in their current form are unlikely to deliver an early transition to e-fuels, active support from national and regional policies is also needed. To this end, the Global Maritime Forum calls on national governments, regional institutions, and collaborative industry initiatives to re-double their focus on zero-emission shipping, for example by finding ways to bridge the cost difference between fossil and e-fuels, supporting the development of required infrastructure and fuel production, and ensuring that more is done to promote the transition in the Global South. As the industry evaluates its investments in this transition, long-term strategies are key to avoid further locking into short-term solutions.”
Notes
[1] According to the IMO Fourth GHG Study, 2020, international shipping alone accounts for ~2.89% of total global CO₂ emissions.
[2] “At a pivotal meeting, the world is set to decide how to cut shipping emissions”, published in The Conversation, April 7, 2025
