Landmark agreement towards achieving net-zero emissions from global shipping by 2050

This article is brought to you in association with the European Commission.

The European Commission welcomes today’s agreement at the International Maritime Organisation (IMO), as a meaningful step towards achieving net-zero greenhouse gas (GHG) emissions from global shipping by 2050. This is a historic deal in the fight against climate change, marking a significant advancement in reducing the environmental impact of the shipping industry on a global scale. While today’s agreement does not yet ensure the sector’s full contribution to achieving the Paris Agreement goals, it constitutes a strong foundation for starting the required energy transition of shipping. The EU and its Member States played a key role in securing the deal and will remain actively engaged in the lead-up to its adoption in October 2025 and implementation in 2027.

In line with the 2023 IMO Strategy, the agreement includes a new measure, setting a global standard for gradually reducing the GHG intensity of marine fuels. It will regulate how “clean” the energy used by a ship should be, based on its climate impact. The measure applies to the full lifecycle of GHG emissions of shipping fuels. It uses standardised criteria and a common certification scheme for fuels that facilitates a level-playing field, irrespective where a fuel is produced, transported or used. As a result, it will prevent emissions from shifting to other sectors and encourage sustainable investments that will reduce emissions throughout the entire lifecycle across the globe. The EU looks forward to strengthening the measures over time to fully deliver on the decarbonisation pledges made in the 2023 IMO Strategy. 

The new measure also introduces a first global pricing mechanism for emissions, which along with financial incentives, will encourage shipping companies to use the cleanest fuels and technologies early on. For example, companies will be incentivised to invest in zero- and near-zero emission marine fuels, like renewable methanol and ammonia. By stimulating investment in these cleaner fuels, the measure will help reduce the shipping industry’s GHG footprint.

The pricing mechanism will apply to a share of international shipping emissions from 2028, with an initial price of USD 100 per tonne of CO2. This will generate significant revenue, estimated to be USD 11-13 billion annually, which will be used to support the development and deployment of these zero- and near-zero emission fuels. Revenues generated from the measure will also be allocated to support a just and equitable transition, ensuring that no country is left behind. Those will be shared fairly, with particular attention given to least developed countries and small island developing states.

Next steps

The agreement will need to be confirmed by the International Maritime Organisation in October 2025. As the negotiations of the new agreement have concluded, it is time for all countries to start working on the implementation of the framework. The Commission will also assess the new global measure to see how it interacts with current EU maritime related regulations, maintaining environmental integrity while avoiding significant double burden. 

Background

The IMO’s 2023 strategy sets out a clear roadmap for reducing greenhouse gas emissions from global shipping, with targets to reduce emissions by at least 20% (striving for 30%) by 2030, at least 70% (striving for 80%) by 2040, both in comparison to 2008 levels; and to achieve net-zero emissions by or around 2050.

This agreement is a major step towards achieving the Strategy’s targets and demonstrates the commitment of the international maritime community to reducing its carbon footprint and promoting its sustainable development.