How countries failed to steer shipping to net zero, and where they go next

Amid threats and tears, nations failed to sign off a ground-breaking deal to curb the sector’s huge appetite for fossil fuels

Shipping burns 350 million tonnes of fuel oil every year, contributing 3% of human-induced greenhouse gas emissions (Image: ARTIMENTE / Alamy)

Negotiators from across the world met in London this month at the UN shipping agency’s headquarters to adopt landmark rules to reduce the sector’s carbon emissions.

Though the rules had been agreed on in April, the meeting at the International Maritime Organization (IMO) ended with deep division and the plans delayed for at least a year. The week-long talks witnessed complaints of intimidation and some delegates brought to tears.

Delegates said the meeting turned into a political battleground, with the US issuing public threats to nations supporting curbs on emissions. Some nations backtracked on their support for tough regulations to make shipowners pay for high-emitting vessels, and instead supported Saudi Arabia’s ultimately successful moves to delay the plans. 

But this was not just about rich fossil-fuel-producing countries scuppering curbs on oil use. Some developing nations voiced fears that the IMO’s plans would spike food prices for their citizens. They said they supported decarbonisation but had not been assured the money raised by the levy would ensure an equitable transition away from oil. 

The shipping industry burns 350 million tonnes of fuel oil every year as it moves over 80% of goods traded worldwide, producing 3% of human-caused greenhouse gas emissions in the process. Advocates for the IMO’s regulations to change this have vowed to address key sticking points and come back next year to try again.

At the IMO in London, overlooking the River Thames, Dialogue Earth spoke with delegates and observers across the debating chamber and bustling lunch-hour canteen – documenting the meeting’s highs and lows. Then, after the unexpected denouement, we asked them if there is a path forward for the net-zero plans.

On the final day of the meeting to adopt the net-zero rules, the debating chamber is filled with anxious delegates uncertain about what comes next for the industry (Image: International Maritime Organization / Flickr, CC BY)

A plan to move away from fossil fuels

Shipping is under huge pressure to move away from fossil fuels, especially from governments in countries threatened by climate change such as the Pacific island nations, and from Europe, where the European Union has introduced its own shipping-emission rules. 

In 2023, IMO member states unanimously agreed to achieve net-zero emissions from the sector “by or around” 2050. To meet this pledge, a Net-Zero Framework was proposed to incentivise investments into greener marine fuels; construction of greener ships; and upgrades of existing vessels and ports to use fuels like green methanol and green ammonia.

The framework set out rules for vessels to reduce their greenhouse gas intensity, meaning their emissions per unit of energy used. Vessels failing to meet the base intensity target would face charges, starting at USD 100 per tonne of CO2 equivalent.

Those failing short of an even more lenient threshold would face a higher rate under the framework: USD 380 per tonne on emissions exceeding the base target. Vessels that overperform and are more efficient than required could earn “surplus units” and trade these with other ships.  Any payments collected would go into a Net-Zero Fund to mitigate impacts of climate change on developing states and reward low-emission ships.

‘Unexpectedly challenging’

The overarching framework was approved in April by a large majority of nations: 63 backed it, 16 were opposed and 24 abstained. Despite strong opposition from the US, many of these countries appeared to have maintained their support heading into this month’s talks – which were supposed to consider some changes to the text and give it a final sign-off. This gave proponents early confidence that adoption was within reach.

The official adoption would mean writing the new rules into the International Convention for the Prevention of Pollution from Ships (Marpol). The plan was set to come into force in 2027 and be fully operational in 2028. But the outcome of this month’s meeting means it could instead be pushed back or even abandoned entirely.

Anita Mäkinen, one of Finland’s representatives to the IMO said she entered the first session on 14 October aware that the geopolitics could threaten the adoption. “But I never really thought it could be this challenging.” 

Finland is part of a group of EU countries pushing for the deal, alongside other vocal proponents such as Brazil and some Pacific island countries including Tuvalu. 

Their initial optimism faded midweek, when the negotiations grew increasingly tense. At one point, tension ran so high the meeting’s chair tried to cut it by asking if there was a doctor in the room.

Delegates from the US and Saudi Arabia made attempts to stall the proceedings. Their tactics ranged from challenging the plan’s adoption to proposing the IMO should require governments’ explicit acceptance for adoption, which would go against the usual IMO approach of assuming acceptance of negotiation outcomes. Meanwhile, more nations expressed doubts about the adoption as the week went on. 

Countries that had previously voted to approve the framework – including China, India and Kenya – supported delaying a vote on the adoption, while major shipping nations such as Greece and Cyprus abstained. On the final day of the meeting, 17 October, countries voted 57 to 49 in favour of delaying, with 21 abstentions.

Note: *Not present means the country’s delegation did not vote • Source: IMO / Graphic: Dialogue Earth

The delay has confused a sector that plans shipbuilding years in advance. “Industry needs clarity to be able to make the investments needed to decarbonise the maritime sector,” said Thomas Kazakos, secretary general of the International Chamber of Shipping.

Pressure from the US

Many delegates attributed the outcome to the US officials’ campaign to derail the framework. This included threats before the meeting to impose visa restrictions on mariners from nations that supported the deal, additional fees if ships from those nations docked at US ports, and even sanctions on officials from countries supporting what the US called “a global carbon tax on Americans”.

Delegates from a Pacific island nation told Dialogue Earth that the capitals of several Pacific states received pressure from high-level US officials, urging them to withdraw support. Mäkinen shared a similar observation, saying the targets for US lobbying were small island states and “big flag states” where large numbers of ships are registered. Many delegates could be seen huddling in private discussions on the IMO hall floor.

“There was so much politics involved and that’s why it was extraordinary,” Mäkinen adds. “We couldn’t discuss and negotiate only on the basis of technical issues of the proposed regulations.”  

Leaving no one behind

US coercion was not the only concern, however. Representatives from developing countries, including small island nations from the Pacific and the Caribbean, raised questions about the framework’s impact on shipping costs and food security. 

During coffee breaks, Dialogue Earth spoke to several chatty delegates in the buzzing main chamber. They said they were troubled by a lack of clarity on the Net Zero Fund’s distribution and how it could help offset the framework’s negative impacts. A study estimates that USD 11-12 billion could be raised annually by the framework between 2028 and 2030, but the implementation guidelines that address revenue-sharing are still under discussion. 

Benoit Bardouille, Dominica’s ambassador and adviser to its prime minister, said that his Caribbean state, which is moving toward 100% renewable energy by 2030, supports the shipping sector being decarbonised, “but it must be done with a certain level of soberness”.

Bardouille, who represented his state at the IMO meeting, said many Caribbean states are heavily reliant on imports. He fears the framework will raise shipping costs, leading to spiralling inflation that is passed onto consumers.

Pawa Limu, Papua New Guinea’s delegate, shared similar concerns. Both Bardouille and Limu want more clarity on how money raised by the IMO scheme will be shared to drive a fair and just transition away from fossil fuels – one that doesn’t leave vulnerable states behind.

Tristan Smith, a professor of energy and transport at University College London, said such worries are “very legitimate”. This year his research group estimated that transportation costs for global trade could rise by around 5% in 2028 to at least 20% by 2035, depending on how strict the rules become.

Much of the transition is predicated on shipping that runs on relatively cheap oil shifting in a significant fashion to more expensive but greener fuels such as green hydrogen, methanol and ammonia.

Smith, who specialises in global shipping decarbonisation, stresses that the IMO cannot achieve its pledge to reach net zero by 2050 without paying a price. “You always have inflationary effects because we’re … moving from a low-cost energy source to a higher cost energy source,” he said. “The low-cost energy source has high environmental costs, but in our economy today, we don’t put a price on those costs.”

Lloyd Fikiasi, a delegate from Vanuatu – the Pacific nation known for championing climate actions – said those unpriced costs should not be underestimated.

“We look beyond those economic impacts. It’s [a matter of] survival. If we don’t take any actions to address greenhouse gas emissions, we will lose our future,” said Fikiasi. 

He believes that the impacts of climate change on food security, migration and many more problems far exceed the economic costs of the shipping framework. Vanuatu abstained on the approval of the plan in April, as it said the framework is not ambitious enough to meet the IMO’s net-zero target.

Advocates remain hopeful

After the vote to delay the framework, member states continued discussions in London on implementation guidelines. These will dictate critical elements of the plan including how the Net-Zero Fund will operate and how low-carbon marine fuels will be certified.

Proponents hope that discussions such as these before the next crunch vote on the overall framework will help resolve the outstanding concerns. 

Smith remains confident that a majority of the IMO member nations support the framework, even though many want more time and clarity on specific elements, or adjustments to how it will work. Fikiasi is less certain, and worries that geopolitics could still stymie agreement next year.

Mäkinen said she remains hopeful even though she too doubts that the political pressure seen this month will disappear in a year.

“I have experienced many negotiations [in which] I wasn’t exactly sure where we would end up. But they always have a happy ending we could agree on,” she said. “I have trust in the IMO miracles.”

Author: Regina Lam

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This article was originally published on Dialogue Earth under the Creative Commons BY NC ND licence. Read the original article.