Nations meet to consider regulations to drive a green transition in
shipping
[October 14, 2025] By
JENNIFER McDERMOTT and SIBI ARASU
The world’s largest maritime nations are gathering in London on Tuesday
to consider adopting regulations that would move the shipping industry
away from fossil fuels to slash emissions.
If the deal is adopted, this will be the first time a global fee is
imposed on planet-warming greenhouse gas emissions. Most ships today run
on heavy fuel oil that releases carbon dioxide and other pollutants as
it’s burned.
Nations are meeting at the International Maritime Organization
headquarters through Friday. The Trump administration unequivocally
rejects the proposal and has threatened to retaliate if nations support
it, setting the stage for a fight over the climate deal.
In April, IMO member states agreed on the contents of the regulatory
framework. The aim is to adopt it at this meeting.
That would be a major win for the climate, public health, the ocean and
marine life, said Delaine McCullough at the Ocean Conservancy. For too
long, ships have run on crude, dirty oil, she said.
“This agreement provides a lesson for the world that legally-binding
climate action is possible," said McCullough, shipping program director
for the nonprofit environmental advocacy group.
“The energy and digital transition of shipping have already started.
However, the absence of global regulations will increase the costs of
this transition in the long run,” said Arsenio Dominguez,
Secretary-General of the IMO, during his opening remarks at the meeting.
Shipping emissions have grown over the past decade to about 3% of the
global total as trade has grown and vessels use immense amounts of
fossil fuels to transport cargo over long distances.
Here's what to know:
The regulations would set a pricing system for gas emissions
The regulations, or “Net-zero Framework,” set a marine fuel standard
that decreases, over time, the amount of greenhouse gas emissions
allowed from using shipping fuels. The regulations also establish a
pricing system that would impose fees for every ton of greenhouse gases
emitted by ships above allowable limits, in what is effectively the
first global tax on greenhouse gas emissions.
There's a base level of compliance for the allowable greenhouse gas
intensity of fuels. There's a more stringent direct compliance target
that requires further reduction in the greenhouse gas intensity.
If ships sail on fuels with lower emissions than what's required under
the direct compliance target, they earn “surplus units," effectively
credits.
Ships with the highest emissions would have to buy those credits from
other ships under the pricing system, or from the IMO at $380 per ton of
carbon dioxide equivalent to reach the base level of compliance. In
addition, there's a penalty of $100 per ton of carbon dioxide equivalent
to reach direct compliance.
Ships that meet the base target but not the direct compliance one must
pay the $100 per ton penalty too.
Ships whose greenhouse gas intensity is below a certain threshold will
receive rewards for their performance.
The fees could generate $11 billion to $13 billion in revenue annually.
That would go into an IMO fund to invest in fuels and technologies
needed to transition to green shipping, reward low-emission ships and
support developing countries so they aren’t left behind with dirty fuels
and old ships.
Looking for alternative fuels
The IMO, which regulates international shipping, set a target for the
sector to reach net-zero greenhouse gas emissions by about 2050, and has
committed to ensuring that fuels with zero or near-zero emissions are
used more widely.
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Tugboats assist a container ship as it prepares to dock at the
Manila International Container Terminal at the Philippine capital
April 8, 2025. (AP Photo/Aaron Favila, File)
 Ships could lower their emissions by
using alternative fuels, running on electricity or using onboard
carbon capture technologies. Wind propulsion and other energy
efficiency advancements can also help reduce fuel consumption and
emissions as part of an energy transition.
Large ships last about 25 years, so the industry would need to make
changes and investments now to reach net-zero around 2050.
If adopted, the regulations will enter into force in 2027. Large
oceangoing ships over 5,000 gross tonnage, which emit 85% of the
total carbon emissions from international shipping, would have to
pay penalties for their emissions starting in 2028, according to the
IMO.
The International Chamber of Shipping, which represents over 80% of
the world’s merchant fleet, is advocating for adoption.
Concerns over biofuels produced from food crops
Heavy fuel oil, liquefied natural gas and biodiesel will be dominant
for most of the 2030s and 2040s, unless the IMO further incentivizes
green alternatives, according to modeling from Transport and
Environment, a Brussels-based environmental nongovernmental
organization.
The way the rules are designed essentially makes biofuels the
cheapest fuel to use to comply, but biofuels require huge amounts of
crops, pushing out less profitable food production, often leading to
additional land clearance and deforestation, said Faig Abbasov,
shipping director at T&E.
They are urging the IMO to promote scalable green alternatives, not
recklessly promote biofuels produced from food crops, Abbasov said.
As it stands now, the deal before the IMO won't deliver net-zero
emissions by 2050, he added.
Green ammonia will get to a price that it’s appealing to ship owners
in the late 2040s — quite late in the transition, according to the
modeling. The NGO also sees green methanol playing an important role
in the long-term transition.
The vote at the London meeting
The IMO aims for consensus in decision-making but it's likely
nations will vote on adopting the regulations.
At the April meeting, a vote was called to approve the contents of
the regulations. The United States was notably absent in April, but
plans to participate in this meeting.
During the opening session on Tuesday, Saudi Arabia, the U.S.,
Russia and a few other countries intervened to express their
reservations about the meeting's agenda, which strongly focuses on
adopting the Net-zero Framework by the end of the week.
Teresa Bui at Pacific Environment said she's optimistic “global
momentum is on our side” and a majority of countries will support
adoption. Bui is senior climate campaign director for the
environmental nonprofit, which has consultative, or non-voting,
status at the IMO.
If it fails, shipping’s decarbonization will be further delayed.
“It's difficult to know for sure what the precise consequences will
be, but failure this week will certainly lead to delay, which means
ships will emit more greenhouse gases than they would have done and
for longer, continuing their outsized contribution to the climate
crisis,” said John Maggs, of the Clean Shipping Coalition, who is at
the London meeting.
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