Charting the Course to Net-Zero: Advancements and Prospects in Global Shipping Decarbonization

1. Summary

• The global initiative to decarbonize international shipping is at a transformative juncture, marked by the adoption of the International Maritime Organization's (IMO) 2023 Strategy. This strategy, which was solidified during the Marine Environment Protection Committee (MEPC) 80 session, highlights an ambitious objective: achieving net-zero greenhouse gas (GHG) emissions by or around 2050. It delineates concrete interim targets, such as a 20-30% reduction in emissions intensity by 2030, and a commitment to adopting zero and near-zero emissions technologies and fuels. The strategy has ushered in rigorous frameworks designed to promote sustainable shipping practices, including the proposal for a goal-based marine fuel standard and a maritime GHG emissions pricing mechanism aimed at funding clean technology transitions, particularly for the most vulnerable countries in the maritime community.

• As of May 16, 2025, significant milestones have been reached towards achieving the crucial 2025 review. The recent MEPC83 negotiations advocated for establishing a global carbon levy alongside stringent fuel standards that embrace low-carbon alternatives. These discussions have unveiled both unified ambitions and contentious debates among member states, particularly regarding equitable financing mechanisms and the acceptable timing for regulatory adoption. Furthermore, the April 11, 2025 net-zero shipping agreement stands as a landmark commitment among IMO member states, setting legally binding targets to drastically reduce fossil fuel dependency in maritime operations and mandating the use of at least 10% zero or near-zero emissions fuel by 2030.

• Looking forward, the establishment of a cohesive roadmap towards 2050 is essential, encapsulating plans for innovative fuel sources, robust regulatory milestones, and significant technological advancements. The commitment to exploring low-carbon fuels such as ammonia and hydrogen underlines the urgency of diversifying energy sources in the shipping sector. Advances in digital technologies and the adoption of hybrid vessels portend an era of more sustainable and efficient maritime operations. Moreover, ensuring that financing mechanisms are adequate and equitable will be crucial for empowering developing countries to engage in this transition, thus preserving the integrity of global climate action.

2. The IMO’s 2023 Strategy: Blueprint for Emissions Reduction

• 2-1. Adoption of the 2023 IMO Strategy

• The International Maritime Organization (IMO) adopted the 2023 Strategy on Reduction of GHG Emissions from Ships during its Marine Environment Protection Committee (MEPC) 80 session. This strategy is a significant update to the Initial GHG Strategy (2018), enhancing the framework for member states with more stringent targets aimed at combating harmful emissions from shipping.

• The 2023 Strategy sets forth a clearly defined vision for the decarbonization of international shipping, including the ambitious target of achieving net-zero GHG emissions by or around 2050. Interim targets involve significant reductions in emissions intensity: a reduction of at least 20% by 2030, striving for 30%, and at least 70% by 2040, aiming for 80% compared to 2008 levels. This structured approach signals a proactive shift toward integrating sustainable practices within the shipping industry.

• 2-2. Short-, mid- and long-term GHG reduction targets

• The 2023 IMO Strategy outlines a series of short-, mid-, and long-term greenhouse gas (GHG) reduction targets that aim to guide the international shipping sector toward a more sustainable future. Specifically, the strategy mandates a minimum reduction of carbon intensity by at least 40% by 2030, compared to 2008 levels. Additionally, it sets aspirational milestones for the adoption of zero and near-zero GHG emission technologies and fuels, targeting at least 5% of energy needs by 2030 and striving for 10%.

• These indicators not only lay the groundwork for immediate action but also establish checkpoints that will necessitate regular reviews and adjustments to ensure compliance and progress. A scheduled review of the strategy is set for autumn 2028, indicating the IMO's commitment to ongoing evaluation and responsiveness to global climate action efforts.

• 2-3. Key measures and implementation mechanisms

• Among the pivotal measures included in the 2023 IMO Strategy is a dual approach comprising both technical and economic elements designed to incentivize the reduction of greenhouse gas emissions. A goal-based marine fuel standard is proposed, regulating the phased reduction of GHG intensity in marine fuels, aimed at enabling the transition toward cleaner energy sources.

• Additionally, the strategy introduces a maritime GHG emissions pricing mechanism, expected to play a crucial role in funding research and development efforts necessary for adopting new technologies. Comprehensive impact assessments conducted during 2023 and 2024 have emphasized the need for these measures to promote a just and equitable energy transition, especially for countries with limited resources, such as least developed countries (LDCs) and small island developing states (SIDS). The adoption plan also outlines an approval process for mid-term measures, culminating in the extraordinary session of MEPC scheduled for autumn 2025.

3. Milestones Towards 2025: Building Momentum

• 3-1. Historical Goals and Early Action on Decarbonization

• The historical pursuit of decarbonization in shipping has evolved through various targeted actions and agreements. Over the past few years, significant attention has been directed towards reducing greenhouse gas emissions (GHG) from maritime operations. The International Maritime Organization (IMO) established an ambitious framework to handle these emissions, clearly outlining the necessity of transitioning to net-zero emissions by or around 2050. Initial steps taken included adopting various non-binding targets aimed at reducing emissions intensity, enhancing fuel efficiency, and incentivizing the adoption of alternative fuels such as green ammonia and hydrogen.

• As early as 2023, the IMO adopted the 2023 Strategy on the Reduction of GHG Emissions from Ships, which included interim targets set for 2030 and 2040. The methodologies implemented aimed to steadily phase out the reliance on fossil fuels and usher in a new era characterized by low- or zero-emission maritime fuel alternatives. By 2025, the IMO had laid the groundwork for critical measures aimed at reinforcing these goals, indicating that strict regulations, including a Global Fuel Standard (GFS) and a carbon levy, would be vital components of this strategy.

• 3-2. Significance of 2025 as a Policy Review Milestone

• The year 2025 has been identified as a pivotal point in maritime decarbonization efforts, serving as a policy review milestone for the IMO. This marks the time when the effectiveness of previously adopted measures and the initial non-binding targets will be consolidated, providing a basis for enhancing the climate framework governing international shipping. In April 2025, the Marine Environment Protection Committee (MEPC) assembled to discuss the proposed technical and economic measures to aid in achieving the 2030 and 2040 emission reduction targets outlined in the 2023 strategy.

• A crucial element of the discussions revolved around the implementation of the GFS and a carbon levy, which are expected to provide both regulatory clarity and financial incentives necessary for the industry to transition towards more sustainable practices. The outcomes of MEPC 83 are anticipated to chart a clearer pathway toward meeting the overarching goal of net-zero emissions by 2050, solidifying 2025's role as a watershed moment in global maritime policy.

• 3-3. Progress in Member-State Commitments

• Member states demonstrated a collaborative spirit in advancing the decarbonization agenda, primarily influenced by the commitments made during the 2023 IMO Strategy adoption. By early 2025, many nations had begun reporting their plans and progress on implementing emissions reduction targets, showcasing various voluntary actions to comply with global goals. Noteworthy progress included commitments from major maritime nations to engage in trials of alternative fuels, and partnerships were formed to foster innovation in clean shipping technologies. Furthermore, it became evident that the economic implications of these policies were substantial, necessitating an equitable approach that would not disproportionately impact smaller nations or developing economies. As a result, discussions around financing mechanisms to support the most impacted countries gained traction, enhancing the commitment of member states toward collective progress in achieving the 2025 targets. Such actions not only reflected the growing recognition of environmental accountability but also indicated a shifting paradigm towards sustainable shipping practices within the international community.

4. Negotiating a Global Carbon Levy and Fuel Standards at MEPC83

• 4-1. Rationale for a global carbon levy

• The rationale for implementing a global carbon levy within the maritime sector has been underscored by the urgent need to reduce greenhouse gas (GHG) emissions from international shipping. As highlighted prior to the negotiations at MEPC83, a carbon levy based on the 'polluter pays' principle seeks to hold shipping firms accountable for their emissions, incentivizing them to invest in cleaner technologies. Experts, including the Transport & Environment (T&E) organization, have recommended a levy of approximately $150 per tonne of GHG emissions. This strategic pricing is anticipated to raise significant funds dedicated to supporting the transition to low-carbon fuels and technologies, particularly benefiting climate-vulnerable nations that lack the resources to adapt to climate change impacts.

• 4-2. Proposal for a global fuel standard

• The proposal for a global fuel standard, integral to the discussions at MEPC83, emerged as a necessary complement to the carbon levy. This standard is designed to ensure that shipping fuels meet specific sustainability criteria, phasing out the dirtiest options while promoting low-carbon alternatives such as green hydrogen. During negotiations, member states expressed varied opinions on the specifics, particularly regarding which fuels qualify as 'green' and how emissions should be calculated. These divergences emphasized the essential balance between regulatory frameworks and industry flexibility.

• 4-3. Positions of stakeholders and negotiating blocs

• The MEPC83 negotiations witnessed distinct positions from various stakeholders and negotiating blocs. Developed nations generally supported stringent regulations to ensure robust decarbonization pathways, while some developing countries expressed concerns about the implications of financial burdens inherent in a carbon levy. Nations like Saudi Arabia and Brazil were particularly resistant, arguing for continued support for the traditional fossil fuel industry. The discussions underscored the complexity of achieving consensus in international maritime negotiations, particularly given the scale and urgency of the climate crisis.

• 4-4. Timeline for regulatory adoption

• While the MEPC83 negotiations aimed to move toward definitive agreements on a carbon levy and fuel standards, the timeline for regulatory adoption remained a contentious issue. Stakeholders acknowledged that, although immediate action is critical, ironing out the details could extend into future meetings. Emphasis was placed on establishing binding targets all the way to 2050 to maintain industry certainty and momentum. Member states were urged to finalize their commitments in subsequent discussions to ensure a cohesive international approach to shipping decarbonization.

5. A Landmark Net-Zero Shipping Agreement Secured

• 5-1. Details of the April 11, 2025 net-zero deal

• On April 11, 2025, the International Maritime Organization (IMO) secured a historic agreement aimed at steering the global shipping industry towards net-zero emissions by 2050. This landmark deal emerged from extensive negotiations that included numerous governmental and industry stakeholders. The agreement is designed to set concrete measures for achieving a substantial reduction in greenhouse gas (GHG) emissions, establishing legally binding targets that exceed those laid out in the voluntary Paris Agreement.

• 5-2. Commitments by IMO Member States

• Under the new agreement, IMO Member States pledged to implement immediate and long-term strategies that will phase out fossil fuel dependency in international shipping. Central to this commitment is the goal to reduce emissions by approximately 20-30% from 2008 levels by 2030, with an objective of achieving net-zero emissions around 2050. The agreement mandates that by 2030, countries are to ensure that at least 10% of the fuel used for shipping vessels comes from zero or near-zero emissions sources. This exclusion of liquefied natural gas (LNG) as an alternative underscores the commitment to transitioning towards truly sustainable fuel options.

• 5-3. Implications for industry and trade

• The implications of this agreement extend far beyond regulatory compliance; they represent a transformative shift in global shipping practices. By aligning industry operations with international climate targets, shipping companies will need to innovate rapidly, transitioning to cleaner technologies and fuels. This transition is expected to not only drive significant GHG reductions but also reshape global shipping routes, trade costs, and competitive dynamics. Additionally, the agreement paves the way for shipping to serve as a model for other sectors grappling with similar carbon reduction challenges.

• 5-4. Remaining challenges for implementation

• Despite the optimism surrounding the 2025 net-zero shipping agreement, significant challenges remain. Key among these is the need for robust financing mechanisms to support the transition to zero-emission fuels and technologies. Negotiations at the International Maritime Organization also revealed diverging interests among member states, particularly concerning the imposition of a carbon price or levy to fund the transition. Finding a universally acceptable approach to this economic measure while ensuring a just transition for vulnerable populations is critical. Without adequate financing and international cooperation, the ambitious targets set within this historic agreement may face hurdles in practical implementation.

6. Future Pathways to 2050: Roadmap and Innovations

• 6-1. Planned regulatory milestones and enforcement

• As the shipping industry gears up for the long-term goal of net-zero greenhouse gas (GHG) emissions by around 2050, a series of regulatory milestones has been outlined. Following the adoption of the IMO’s 2023 Strategy and the subsequent finalization of the IMO Net-Zero Framework at MEPC 83 in April 2025, Member States are set to convene for an extraordinary session in Autumn 2025 to officially adopt the mid-term measures aimed at reducing GHG emissions.

• The mid-term measures will impact operational practices across the global fleet beginning in 2028, 16 months after adoption. These regulations will introduce a phased reduction in the GHG intensity of marine fuels, which is critical for driving the energy transition of shipping. Future reviews and assessments, such as the 2028 IMO Strategy review, will ensure that emissions targets remain ambitious and are adjusted based on scientific and technological advancements.

• 6-2. Emerging low-carbon and zero-emission fuels

• The exploration and development of low-carbon and zero-emission fuels are essential components of the maritime decarbonization strategy. According to the latest discussions held at the MEPC meetings, alternative fuels such as ammonia, hydrogen, and biofuels are expected to play a significant role in achieving the net-zero target. As of May 2025, multiple pilot projects and partnerships are underway focused on the production and utilization of these fuels.

• For instance, ammonia and hydrogen produced from renewable sources are lauded as some of the most promising options for decarbonizing maritime operations. Additionally, biofuels derived from sustainable sources, such as waste cooking oil, have already been introduced in several shipping operations, demonstrating potential for scalability while simultaneously reducing lifecycle emissions. The commitment to diversifying fuel sources symbolizes a crucial step toward operational resilience in the face of global energy transitions.

• 6-3. Technological innovations and scale-up

• As we advance towards 2050, technological innovations will be at the heart of transforming the shipping industry. Adoption of hybrid propulsion systems, carbon capture technologies, and fully electric vessels are already in experimental stages, with increasing investments directed towards scaling these solutions. Significant advancements in digital technologies, such as predictive analytics and autonomous systems, are also poised to enhance operational efficiencies and reduce emissions across fleets.

• For instance, the integration of artificial intelligence (AI) and machine learning into shipping operates allows better routing and fuel optimization, thus promoting environmentally friendly practices while maintaining economic viability. Furthermore, the development and deployment of hybrid and battery-powered ships, specifically designed for shorter voyages, indicate a promising trajectory towards electrification of the maritime sector.

• 6-4. Monitoring, financing, and stakeholder collaboration

• Successful implementation of the IMO strategies will hinge on effective monitoring, robust financing mechanisms, and strong collaboration among stakeholders. The establishment of the GHG emissions monitoring framework, which became mandatory in January 2023, marks a significant step towards greater transparency and accountability within the industry. This framework necessitates each vessel to accurately report emissions data, which will inform future regulatory adjustments and baseline assessments.

• Financing these transitions presents a significant challenge, particularly for developing nations. Various funding initiatives and partnerships are necessary to support the implementation of cleaner technologies. The commitment from organizations like the European Investment Bank to invest in green port infrastructure is a positive sign of the collective effort required to embolden this transition. Coordinated actions among governments, financial institutions, and the maritime industry will foster an environment where sustainability aligns with economic incentives, thereby ensuring long-term success in achieving net-zero emissions.

Conclusion

• The trajectory of the global shipping sector has decisively transitioned from theoretical ambition to actionable implementation, particularly as evidenced by the IMO’s 2023 Strategy, MEPC83 negotiations, and the historic April 2025 net-zero agreement. These developments are not merely regulatory milestones but rather critical inflection points that could define the sustainability of maritime trade in alignment with global climate goals. To maintain momentum toward a net-zero outcome by 2050, it is imperative that the shipping industry accelerates the deployment of zero-emission fuels alongside strengthened regulatory frameworks that encourage innovation while ensuring accountability.

• Moreover, robust financing mechanisms will be pivotal to support this transition, enabling all nations—especially those with limited resources—to contribute to and benefit from sustainable shipping practices. As discussions surrounding carbon levies and global fuel standards evolve, it is vital to foster international collaboration that not only drives policy coherence but also ensures that the burden of transition is equitably shared. Rigorous monitoring and adaptive policy design will undergird these efforts, ensuring that global maritime trade not only meets urgent decarbonization targets but also aligns seamlessly with broader climate action objectives.

• The implications of these commitments extend beyond regulatory compliance; they present opportunities for the shipping industry to not only reduce GHG emissions but also to redefine global trade dynamics, reduce operational costs, and inspire similar initiatives across other sectors. As the industry embarks on this crucial journey, continual engagement among stakeholders—from governments and industry players to civil society—will be essential to adapt and thrive in a rapidly evolving environmental landscape.

Glossary

• GHG emissions: Greenhouse gas (GHG) emissions refer to the release of gases such as carbon dioxide, methane, and nitrous oxide into the atmosphere, which contribute to global warming and climate change. In the context of shipping, reducing GHG emissions is essential to meet international climate targets, notably the goal of net-zero emissions by 2050.

• IMO: The International Maritime Organization (IMO) is a specialized agency of the United Nations responsible for regulating shipping. It develops and maintains a regulatory framework for shipping safety, environmental performance, and legal matters. The IMO's 2023 Strategy marks a significant commitment toward reducing emissions from ships.

• net-zero: Net-zero refers to achieving a balance between the amount of greenhouse gas emissions produced and the amount removed from the atmosphere. For the shipping industry, this means significantly reducing emissions by or around 2050 to align with global climate goals.

• shipping decarbonization: Shipping decarbonization is the process of transitioning the maritime industry away from fossil fuels and reducing greenhouse gas emissions associated with shipping operations. This transition is critical for meeting international climate agreements and targets.

• carbon levy: A carbon levy is a fee imposed on companies for their carbon dioxide emissions, based on the principle that polluters should contribute to the costs associated with climate change. The proposed global carbon levy within the shipping sector aims to encourage investment in cleaner technologies and fuels.

• fuel standard: A fuel standard is a regulation that defines the criteria that fuels must meet to be considered acceptable for use. In the context of shipping, the proposal for a global fuel standard aims to phase out the use of highly polluting fuels and promote sustainable, low-carbon alternatives.

• MEPC83: Marine Environment Protection Committee (MEPC) 83 refers to the 83rd session of the IMO's committee focused on protecting the marine environment. This session was crucial for negotiating measures related to a carbon levy and fuel standards aiming at reducing emissions in the shipping industry.

• 2023 IMO Strategy: The 2023 IMO Strategy is a comprehensive framework adopted by the International Maritime Organization to reduce greenhouse gas emissions from ships. It includes interim targets for emission reductions leading up to the aspirational goal of net-zero by 2050.

• sustainable shipping: Sustainable shipping refers to practices within the maritime industry that prioritize environmental stewardship, resource efficiency, and reduced emissions. It encompasses innovations in technology, fuel, and operational practices that help achieve climate goals.

• 2050 target: The 2050 target refers to the ambitious goal established by the international community to achieve net-zero greenhouse gas emissions by around the year 2050. This target is critical for limiting global warming and ensuring a sustainable future.

• maritime policy: Maritime policy encompasses the regulations, strategies, and actions taken by governments and international organizations to manage maritime activities, including shipping. Effective maritime policy is essential for promoting sustainable practices within the shipping sector in alignment with climate objectives.

• climate action: Climate action refers to efforts and measures aimed at combating climate change and its impacts. In the shipping context, this includes reducing emissions, transitioning to green technologies, and participating in international agreements such as the Paris Agreement to limit global temperature rise.

Source Documents

• IMO's work to cut GHG emissions from shipshttps://www.imo.org/en/MediaCentre/HotTopics/Pages/Cutting-GHG-emissions.aspx
• Why International Shipping Needs a Global Carbon Levy AND a Global Fuel Standard - CleanTechnicahttps://cleantechnica.com/2025/04/08/why-international-shipping-needs-a-global-carbon-levy-and-a-global-fuel-standard/
• Landmark deal to put shipping on course for net-zero is in sighthttps://www.climatechangenews.com/2025/04/03/landmark-deal-to-put-shipping-on-course-for-net-zero-is-in-sight/
• - Cyprus Shipping Newshttps://cyprusshippingnews.com/2025/03/05/why-2025-is-such-an-important-year-for-shipping-decarbonisation/
• Decarbonization of shipping - Wikipediahttps://en.wikipedia.org/wiki/Decarbonization_of_shipping