Global Maritime Nations Weigh First-Ever Carbon Fee to Curb Shipping Emissions

Published: October 14, 2025, 21:45 EDT

Nations are meeting in London this week to decide whether to impose the world’s first global carbon fee on shipping emissions. The proposal, debated at the International Maritime Organization (IMO), aims to push the maritime industry toward cleaner fuels and net-zero emissions by 2050. The outcome could redefine global trade’s environmental footprint.

A Global Push for Cleaner Shipping

The world’s leading maritime nations convened in London on Tuesday to consider a historic framework designed to reduce carbon emissions from international shipping — one of the most energy-intensive sectors in global trade.

If adopted, the proposal would mark the first time a global fee is applied to greenhouse gas emissions. Most large vessels currently run on heavy fuel oil, a high-emission energy source responsible for nearly 3% of total global carbon output, according to the International Maritime Organization.

The meeting, held at IMO headquarters, runs through Friday and will determine whether the long-debated plan becomes binding regulation beginning in 2027.

New Rules for a Net-Zero Industry

The proposed Net-Zero Framework establishes two key components: a marine fuel standard that gradually limits greenhouse gas emissions and a pricing system that imposes fees for emissions exceeding set thresholds.

Ships emitting more than the allowed amount of carbon dioxide per ton of fuel would be required to pay $380 per ton to meet base compliance levels. Vessels that fail to meet stricter direct compliance targets would face an additional $100 per ton penalty, according to IMO documents reviewed by Reuters.

The framework also rewards lower-emission ships with “surplus units,” which can be traded or sold to higher-emission operators — creating an international carbon credit market within the shipping industry.

Funding the Green Transition

Revenue from the proposed carbon fee — estimated between $11 billion and $13 billion annually — would be directed to an IMO-managed fund. The fund would finance research and deployment of low- and zero-emission fuels, incentivize energy-efficient vessel designs, and assist developing nations in modernizing fleets.

Environmental advocates say the policy could accelerate global decarbonization.
“This agreement provides a lesson for the world that legally binding climate action is possible,” said Delaine McCullough, director of shipping policy at Ocean Conservancy. “It would be a major win for the climate, for the oceans, and for global public health.”

Transitioning Away from Fossil Fuels

Shipping currently contributes around 3% of total global greenhouse gas emissions, but the sector’s carbon footprint has grown as global trade expands.

The IMO has pledged to achieve net-zero emissions by 2050, calling for a major shift toward clean energy technologies. Ships could reduce emissions through alternative fuels such as green methanol and ammonia, or by adopting wind-assisted propulsion, electrification, and carbon capture systems.

Because most commercial vessels have an operational lifespan of about 25 years, experts warn that industry investment in greener technologies must accelerate now to meet mid-century targets.

Implementation Timeline and Scope

If approved, the regulations will take effect in 2027, with enforcement beginning in 2028 for ships exceeding 5,000 gross tonnage — vessels responsible for roughly 85% of international shipping emissions.

The International Chamber of Shipping, representing over 80% of the global merchant fleet, has voiced support for adoption, noting that clear rules could guide long-term investment in sustainable technologies.

Concerns Over Biofuels and Food Crops

Despite broad optimism, environmental groups have raised concerns over the potential reliance on biofuels derived from food crops, which could compete with agricultural production and lead to deforestation.

“The way the rules are structured makes biofuels the cheapest compliance option, but that comes with major risks,” said Faig Abbasov, shipping director at Transport & Environment, a Brussels-based NGO. “We urge the IMO to promote scalable green alternatives rather than fuels that rely on land-intensive crops.”

Modeling from the group suggests green ammonia may not reach competitive pricing until the late 2040s, while green methanol could play a pivotal role in bridging the gap before full decarbonization.

Geopolitical Tensions and U.S. Opposition

The debate has drawn political friction. The United States has strongly opposed the proposal, with the Trump administration warning of potential retaliation against nations that back the plan. Analysts say this resistance could test global unity on climate measures.

Despite Washington’s stance, many countries — including members of the European Union, Japan, and several Pacific island states — have indicated support, arguing that maritime decarbonization is essential to achieving global climate goals.

Vote Expected by Friday

The IMO typically seeks consensus, but observers expect a vote later this week if disagreements persist.

“It’s difficult to know what the consequences will be if this fails,” said John Maggs of the Clean Shipping Coalition. “But a delay would mean continued high emissions, and the world cannot afford that.”

Environmental groups, including Pacific Environment, remain hopeful that momentum is shifting toward adoption. “Global momentum is on our side,” said Teresa Bui, the group’s senior climate campaign director.

If passed, the decision could mark a defining step in reshaping the future of maritime transport — one of the last major industries yet to undergo a full-scale energy transition.