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Historic Tide Turns for Shipping: Landmark IMO Deal Sets Course for Net-Zero Emissions by 2050

EUROPEAN UNION
Wednesday, April 16, 2025, 00:10 (GMT + 9)

EU hails groundbreaking agreement featuring global fuel standards and a pioneering carbon pricing mechanism to accelerate shipping's green transition.

The European Commission has lauded today's agreement at the International Maritime Organisation (IMO) as a decisive step towards achieving net-zero greenhouse gas (GHG) emissions from global shipping by 2050. This historic deal marks a significant leap forward in the global fight against climate change, promising a substantial reduction in the environmental impact of the shipping industry worldwide. While acknowledging that the agreement doesn't yet guarantee the sector's full alignment with Paris Agreement goals, the EU views it as a robust foundation for initiating the essential energy transition of shipping. The EU and its Member States played a pivotal role in securing this agreement and will remain actively engaged in the lead-up to its formal adoption in October 2025 and its implementation in 2027.

A key component of this agreement, aligned with the 2023 IMO Strategy, is a new measure establishing a global standard for the progressive reduction of the GHG intensity of marine fuels. This will regulate the "cleanliness" of a ship's energy consumption based on its comprehensive climate impact, considering the full lifecycle emissions of shipping fuels. The measure employs standardized criteria and a unified certification scheme for fuels, ensuring a level playing field regardless of where the fuel is produced, transported, or utilized. Consequently, it aims to prevent emissions leakage to other sectors and incentivize sustainable investments that will drive emission reductions across the entire lifecycle globally. The EU anticipates further strengthening these measures over time to fully realize the decarbonization commitments outlined in the 2023 IMO Strategy.

The new agreement also introduces a groundbreaking global pricing mechanism for emissions. This, coupled with financial incentives, will encourage shipping companies to adopt the cleanest fuels and technologies early on. For instance, it will incentivize investments in zero- and near-zero emission marine fuels such as renewable methanol and ammonia, thereby contributing to a reduced GHG footprint for the shipping industry.

The pricing mechanism will apply to a portion of international shipping emissions starting in 2028, with an initial price of USD 100 per tonne of CO2. This is projected to generate substantial revenue, estimated at USD 11-13 billion annually, which will be strategically reinvested to support the development and deployment of these zero- and near-zero emission fuels. Furthermore, revenues generated will be allocated to facilitate a just and equitable transition, ensuring that no country is left behind, with a fair distribution prioritizing least developed countries and small island developing states.

EU Commissioners' Perspectives:

Apostolos Tzitzikostas, Commissioner for Sustainable Transport and Tourism, stated: “Today’s landmark deal highlights the strong commitment of the international maritime community to reducing the sector’s carbon footprint while ensuring a just transition and a level playing field. In line with the EU’s net-zero ambitions, this agreement paves the way for long-term investments across the entire maritime fuel value chain, strengthening the industry’s sustainability and competitiveness for years to come. The Commission will remain actively engaged to ensure its adoption and effective implementation.”

Wopke Hoekstra, Commissioner for Climate, Net Zero and Clean Growth, added: “This agreement is a significant milestone, not just for shipping decarbonisation, but for global climate action as a whole. The agreement represents a key step towards achieving net-zero emissions in the maritime sector. This global achievement is even more remarkable and encouraging in the current geopolitical context. It shows that multilateralism remains the way to go. The Commission will continue to engage to increase IMO measures’ ambition over time.”

Next Steps:

The agreement now requires formal confirmation by the International Maritime Organisation in October 2025. With negotiations concluded, the focus shifts to all countries to commence work on the framework's implementation. The European Commission will also assess the new global measure to determine its interaction with existing EU maritime regulations, ensuring environmental integrity while avoiding significant double burdens.

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Background:

The IMO's 2023 strategy provides a clear roadmap for reducing greenhouse gas emissions from global shipping, setting targets of at least a 20% (striving for 30%) reduction by 2030, and at least a 70% (striving for 80%) reduction by 2040, both compared to 2008 levels, with the ultimate goal of achieving net-zero emissions by or around 2050.

This landmark agreement represents a major stride towards achieving the Strategy's ambitious targets and underscores the international maritime community's commitment to reducing its carbon footprint and fostering sustainable development.

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