In a move set to reshape one of the world’s most polluting industries, the International Maritime Organization (IMO) has approved draft rules for the first-ever global carbon pricing system for shipping, paired with a mandatory marine fuel standard. The decision—reached after nearly a decade of negotiations—was finalized at the 83rd session of the Marine Environment Protection Committee (MEPC) in London.
The two-part regulatory package is designed to bring the sector in line with the IMO’s goal of net-zero emissions by around 2050. The new rules are expected to be formally adopted in October 2025, take effect in 2027, and include a global carbon tax beginning in 2028.
A First for Any Global Industry
Once adopted, this will be the first time a carbon tax and fuel emissions standard have been applied industry-wide on a global scale. The new regulations will target large ships over 5,000 gross tonnage, which are responsible for approximately 85% of international shipping emissions.
Under the proposed framework:
- Ships will be required to cut their greenhouse gas fuel intensity (GFI) over time.
- Vessels that emit more than allowed will need to pay a carbon fee or switch to cleaner fuels.
- The carbon tax will start at $100 to $380 per tonne of excess emissions, depending on severity.
- Emissions will be measured on a well-to-wake basis, accounting for the entire fuel lifecycle.
The IMO’s accompanying Net-Zero Fund will collect tax revenues and allocate them to support:
- Clean tech R&D
- Green port infrastructure
- Maritime decarbonization in developing countries
- Training and capacity building for a just transition
Key Elements of the IMO Net-Zero Framework
The IMO Net-Zero Framework will be included in a new Chapter 5 of Annex VI (Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships (MARPOL).
MARPOL Annex VI currently has 108 Parties, covering 97% of the world’s merchant shipping fleet by tonnage, and already includes mandatory energy efficiency requirements for ships.
The goal is to achieve the climate targets set out in the 2023 IMO Strategy on the Reduction of GHG Emissions from Ships, accelerate the introduction of zero and near-zero GHG fuels, technologies, and energy sources, and support a just and equitable transition across the maritime industry.
Divided but Historic
The vote passed with support from 63 countries, including India, China, and Brazil. But it wasn’t without controversy. Oil-exporting nations like Saudi Arabia, UAE, and Russia opposed the decision. The United States abstained, withdrawing from negotiations late in the process over concerns about inflation and fund redistribution.
Still, many saw the approval as a breakthrough.
“This is the first regulation of its kind,” said Jesse Fahnestock of the Global Maritime Forum. “It’s a compromise, but a necessary one.”
Critics, however, say the agreement doesn’t go far enough. Pacific Island nations and environmental groups pushed for a flat-rate global levy with wider climate finance goals. But the final design restricts revenues to shipping-sector use only, excluding broader climate aid.
“This week, IMO member states squandered a golden opportunity,” said Delaine McCullough of the Clean Shipping Coalition.
Shipping’s Emissions Problem
Maritime transport moves nearly 90% of global trade and emits around 3% of total global greenhouse gases—about 1 billion tonnes of CO₂-equivalent annually. Unlike aviation or road transport, shipping has long operated without global climate obligations.
The sector’s emissions have continued to rise with trade. The IMO’s 2023 GHG Strategy targets a 20%–30% cut by 2030 and net-zero by 2050, but without action, emissions could keep climbing.
UNCTAD estimates full decarbonization will require $8–28 billion annually for new vessels and up to $90 billion for fuel infrastructure, with green fuels still 3–4x more expensive than diesel. The carbon tax could generate $30–40 billion by 2030, helping to close this investment gap.
What Comes Next
- October 2025: Final adoption of MARPOL Annex VI amendments
- Spring 2026: Approval of implementation guidelines (MEPC 84)
- 2027: Entry into force
- 2028: Carbon tax takes effect
The carbon levy is just one part of the IMO’s new Chapter 5 to MARPOL Annex VI, which will cover emissions reduction, fuel standards, and the economic measure.
Whether the deal is enough to transform shipping’s climate future remains to be seen. But with this move, the IMO has pushed maritime emissions into the global spotlight—and taken the first real step toward cleaning up the world’s cargo fleet.
