On April 11, 2025, the International Maritime Organization (IMO) formally approved the draft amendment to Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL) at the Marine Environment Protection Committee (MEPC 83) meeting held in London. The adoption of the draft amendment marks a historic turning point for the global shipping industry to move towards the goal of net zero emissions, and lays a solid policy foundation for the global response to climate change and the promotion of green shipping.

(Photo source: International Maritime Organization (IMO))

The global shipping industry transports about 90% of international trade goods each year, but its carbon emissions account for 3% of the global total, equivalent to the annual emissions of Germany. If the current trend continues, shipping carbon emissions may increase to 17% of the global total by 2050. The IMO agreement directly responds to the 1.5℃ temperature control target of the Paris Agreement, filling the institutional gap in emission reduction in the transnational industry.

Core mechanism of the agreement: "Dual Track System" drives carbon neutrality

1. Mandatory fuel standards

The new regulations require that large ocean-going ships with a total tonnage of more than 5,000 tons (accounting for 85% of global shipping carbon emissions) must reduce the greenhouse gas intensity of fuel year by year, and ultimately achieve the net zero target in 2050.

2. Carbon pricing mechanism

For the first time, a global shipping carbon tax will be introduced, and fees will be levied on ships with excessive emissions. The revenue will be injected into the "IMO Net Zero Fund", which will be mainly used for:

- Reward low-emission ships; 

- Support innovation, research, infrastructure and just transition initiatives in developing countries;

- Fund training, technology transfer and capacity building to support the IMO GHG Strategy;

- Mitigate negative impacts on vulnerable States, such as Small Island Developing States and Least Developed Countries.

Implementation schedule and transitional arrangements

- October 2025: The amendment will be submitted to the IMO meeting for review;

- Effective in 2027: A two-year transition period will be set for companies to adjust their operating models and invest in new technologies;

- Key node in 2030: 5%-10% of shipping energy is required to come from zero-carbon fuels, laying the foundation for the 2050 target.

Controversy and challenges: The balance problem under the game of interests

Although most countries support this measure, there are also obvious differences in the vote.

The agreement was passed in a vote held on April 11 with 63 votes in favor and 16 votes against, with China voting in favor. Some countries are worried that strict emission reduction standards and high fines will affect their traditional fuel industries and national economic interests.

It is worth noting that the United States withdrew from the International Maritime Organization climate negotiations held in London, urged other countries to do the same, and threatened to take "reciprocal measures" for any fees charged to American ships.

Difficulty in implementation:

- Technical feasibility: The large-scale application of zero-carbon fuels still needs to break through the bottlenecks of safety and cost;

- Regulatory complexity: Multinational ships need to coordinate the laws of multiple countries, and IMO needs to establish a unified monitoring and verification system;

- Fairness issues: How to ensure that developing countries do not lose their trade advantages due to increased costs.

Industry impact: Reconstructing the global shipping value chain

1. Reshaping costs and competitiveness

Carbon taxes will push up shipping costs, and in the short term may lead to a 5%-10% increase in freight rates. In the long run, companies that take the lead in adopting clean energy will seize the market opportunity.

2. Investment vane

- Alternative fuel infrastructure: Green ammonia filling stations and hydrogen energy storage and transportation networks have become investment hotspots;

- Digital tools: Electronic record books and carbon emission monitoring systems have surged in demand.

3. ESG strategy upgrade

Shipping companies need to include emission reduction in the core indicators of ESG disclosure and explore financing tools such as carbon credit trading and green bonds.

The "New Age of Navigation" for the Shipping Industry

The net-zero emission framework approved by IMO this time is an important step taken by the international community in addressing climate change and promoting sustainable development. As the "regulator" of the global shipping industry, IMO not only urges the industry to carry out green technology innovation by scientifically setting emission reduction standards and economic incentive mechanisms, but also provides a platform for reference and cooperation for governments. Although there are still multiple challenges in the implementation process, such as technology, economy and international coordination, this measure will undoubtedly promote the unprecedented transformation of the global shipping industry and inject continuous impetus into the global carbon reduction goals and the construction of ecological civilization.

Author: Qinger