Global Shipping Emissions Pact Finally Reached
A World-First: Shipping Industry Faces Carbon Price After Decade of Negotiations
After nearly ten years of fraught talks, almost 200 nations have agreed on a historic global pact to curb greenhouse gas emissions from shipping-a sector responsible for about 3% of worldwide emissions and over 90% of global trade. The agreement, brokered by the International Maritime Organization (IMO), introduces the first-ever mandatory carbon pricing and fuel standards for large ocean-going vessels, marking a pivotal moment in the fight against climate change.
What’s in the Deal?
Carbon Pricing: Ships emitting above set greenhouse gas thresholds will pay a fee, starting at a minimum of $100 per tonne of CO₂, with penalties for non-compliance reaching up to $380 per tonne by 2028.
Fuel Standards: A global marine fuel standard will gradually require cleaner, low-carbon fuels, pushing the industry toward net-zero emissions by 2050.
Scope: The regulations apply to vessels over 5,000 gross tonnage-covering 85% of shipping emissions-and are set to enter into force in 2027, pending formal adoption in October 2025.
Revenue: The scheme is expected to generate around $10 billion annually, earmarked for investment in green fuels and technologies.
Winners, Losers, and the Battle for Consensus
Supporters: 63 countries, including China, India, Japan, and many European states, backed the deal. The EU played a key role in brokering the agreement and sees it as a foundation for further strengthening climate action in shipping.
Opposition: 16 nations, led by Saudi Arabia and Russia, voted against, while 24-including several Pacific Island states abstained, arguing the measures are insufficient to protect the most climate-vulnerable nations..
United States: The U.S. walked out of negotiations, threatening reciprocal measures if fees are imposed on its ships, but the pact covers all vessels regardless of flag, including those registered in the U.S.
The Good, the Bad, and the Uncertain
Hopeful First Step: This is the first time a global sector faces an industry-wide carbon price, setting a precedent for international climate action.
Climate Impact: The IMO expects an 8% drop in emissions by 2030-well short of the 20% target set in its own 2023 strategy, sparking concerns the agreement is not ambitious enough.
Equity Concerns: No guarantees exist that revenue will flow to the countries most affected by climate change, such as small island states[4].
Critics say:
“We came as climate vulnerable countries-with the greatest need and the clearest solution. And what did we face? Weak alternatives from the world’s biggest economies.”
~ Simon Kofe, Tuvalu’s Minister for Transport, Energy, Communication and Innovation
Proponents argue:
“This will be the first binding decision that will compel shipping companies to decarbonize and transition to alternative fuels.”
~Faig Abbasov, European maritime policy advocate
What’s Next?
Formal Adoption: The pact is slated for formal adoption in October 2025, with implementation beginning in 2027.
Future Negotiations: Many countries, especially Pacific Island states, vow to push for stronger measures and more equitable funding at the next round of talks.
Industry Watch: The shipping sector now faces a new era of climate accountability, with the world watching to see if this compromise can deliver on its promise-or if ships will simply pay to pollute.
Bottom Line
The global shipping emissions pact is a breakthrough-if not a perfect one. It’s a rare example of international cooperation on climate, setting the stage for deeper cuts and fairer solutions in the years ahead. The world’s ships are now on notice: the journey to net zero has officially set sail.
Sources: IMO, SGFGATE, Geographical, BBC, Europa, ESG Today, EcoWatch, NY Times, Reuters, CleanTechnica, Climate News, AP, Energy Live, ICS, IEA, GMF, Wiki,
Topics: Energy Transition, Emissions, Marine Life