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The IMO’s Extraordinary Session was meant to anchor a global decarbonisation framework for shipping. Instead, it revealed just how politically and economically complex that mission has become. With the adoption of the Net-Zero Framework deferred, the centre of gravity in carbon regulation is shifting, from global negotiation rooms to regional markets.
The recent IMO MEPC Extraordinary Session 2 (ES/2) was, in every sense, extraordinary. Far from being a typical week at the IMO, it brought together nearly 1,200 delegates in person and another 1,000 online, representing 139 Member States and numerous NGOs, to adopt the approved Net-Zero Framework (NZF) under MARPOL Annex VI, which was designed to anchor international shipping’s greenhouse-gas (GHG) ambitions within a global framework.
What was expected to be a decisive step toward global emissions regulation became a vivid demonstration of just how politically and economically complex decarbonisation has become for the shipping industry.
Across four days, the MEPC ES/2 evolved from cautious optimism to procedural gridlock.
Day 1 opened with clear divides between those pushing for deeper decarbonisation and those warning of excessive economic burden.
During this day, the UAE introduced a proposal for a global carbon clause. Although the clause does not create a binding rule (it is an approved clause under the resolution), it signals a shared intention among Member States to eventually avoid duplicative carbon pricing systems once the NZF is adopted. This signal comes at a time when emissions regulation at regional and national levels is accelerating rapidly.
In Europe, the EU ETS and FuelEU Maritime are already active regulations. The ETS currently covers ships above 5,000 GT, expanding from 70% to full coverage next year, with methane and nitrous oxide also included. FuelEU Maritime targets the fuel itself, introducing a progressive GHG intensity reduction of 2% in 2025, 6% by 2030, and 80% by 2050.
Beyond Europe, the UK ETS (from 2026), Türkiye’s forthcoming framework, and South Korea’s ETS are adding layers to the regulatory landscape. Meanwhile, Africa’s Sovereign Carbon Initiative is advancing, with Djibouti and Gabon already applying carbon levies and several other African countries exploring similar measures.
If additional schemes follow and are priced at “EU level (USD 180 per tonne CO2), the cumulative carbon cost for shipping could exceed USD 100 billion annually by 2030, assuming a business as usual scenario).
Though the UAE’s proposal remains non-binding, it represents an important moral and political signal to the industry. Still, uncertainty persists about how these frameworks will interact in practice, especially as some countries have already allocated emissions-related revenue in their national budgets.
Day 2 became procedural when delegations debated whether to adopt the MARPOL amendments through tacit or explicit acceptance, a technical question with significant political implications. Since 1973, the IMO has used the tacit acceptance procedure, meaning that if the amendment is adopted by a two-thirds majority during the meeting, a ten-month period begins. During this time, if States representing 50% of the world’s merchant fleet tonnage object, the amendment will not enter into force.
The explicit acceptance procedure, on the other hand, would require a specified number or percentage of Parties to formally accept the amendment before it could enter into force, a process that could take several years. Even the IMO’s own website notes that amendments adopted under this procedure rarely, if ever, enter into force.
The United States and Saudi Arabia requested that the explicit acceptance procedure be applied. As a result, the drafting group included both procedures in the revised text, with the decision deferred to Day 4 of the meeting.
Day 3 saw slow progress as pleanary struggled to reconcile positions.
Day 4 opened with the expectation of reviewing the Working Group report (on the UAE proposal on carbon pricing), followed by the formal approval of the Drafting Group text (regarding the tacit vs. explicit acceptance procedures) and a vote on the adoption of the NZF.
Instead, a series of motions and procedural challenges emerged, this time from Brazil, Singapore, Saudi Arabia, Denmark, and the United States. The atmosphere quickly became complex: interventions overlapped, and multiple points of order were raised.
Saudi Arabia, supported by Russia, formally moved to suspend the session for one year, citing the need for further consultation and consensus. The motion passed with 57 votes in favour, 49 against, 21 abstentions, and 8 absent.
As a result, the adoption of the MARPOL Annex VI amendments under the NZF has been postponed, with discussions expected to resume during MEPC/ES.3 in October 2026.
While the IMO process is paused, regulatory momentum at regional and national levels continues to accelerate. The EU ETS and FuelEU Maritime will both be reviewed in 2026/2027, though neither is likely to scale back. The UK ETS remains on track for 2026, and new regional systems in Türkiye and Africa are advancing.
Meanwhile, the 2023 IMO GHG Strategy remains in force, meaning that short-term measures such as CII and EEXI could be further tightened to keep the IMO aligned with its 2030 and 2040 targets.
Even with regulatory uncertainty, one message is clear: the world will not wait. Regional and national carbon measures are moving full steam ahead, and stakeholders who actively manage their emissions will gain a competitive advantage.
At Siglar Carbon, we believe that data-driven carbon intelligence will become as critical as market intelligence. By quantifying, forecasting, and managing carbon exposure, companies can turn regulatory challenges into strategic and commercial opportunities. In the decade ahead, success in shipping will depend not only on operational efficiency but also on how effectively emissions data are understood and acted upon. The recent MEPC ES highlighted both the difficulty and the necessity of achieving alignment on decarbonisation. While that process may take time, the trajectory is set, and companies that prepare now will be best positioned to lead the transition.
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The IMO’s Extraordinary Session was meant to anchor a global decarbonisation framework for shipping. Instead, it revealed just how politically and economically complex that mission has become. With the adoption of the Net-Zero Framework deferred, the centre of gravity in carbon regulation is shifting, from global negotiation rooms to regional markets.
The recent IMO MEPC Extraordinary Session 2 (ES/2) was, in every sense, extraordinary. Far from being a typical week at the IMO, it brought together nearly 1,200 delegates in person and another 1,000 online, representing 139 Member States and numerous NGOs, to adopt the approved Net-Zero Framework (NZF) under MARPOL Annex VI, which was designed to anchor international shipping’s greenhouse-gas (GHG) ambitions within a global framework.
What was expected to be a decisive step toward global emissions regulation became a vivid demonstration of just how politically and economically complex decarbonisation has become for the shipping industry.
Across four days, the MEPC ES/2 evolved from cautious optimism to procedural gridlock.
Day 1 opened with clear divides between those pushing for deeper decarbonisation and those warning of excessive economic burden.
During this day, the UAE introduced a proposal for a global carbon clause. Although the clause does not create a binding rule (it is an approved clause under the resolution), it signals a shared intention among Member States to eventually avoid duplicative carbon pricing systems once the NZF is adopted. This signal comes at a time when emissions regulation at regional and national levels is accelerating rapidly.
In Europe, the EU ETS and FuelEU Maritime are already active regulations. The ETS currently covers ships above 5,000 GT, expanding from 70% to full coverage next year, with methane and nitrous oxide also included. FuelEU Maritime targets the fuel itself, introducing a progressive GHG intensity reduction of 2% in 2025, 6% by 2030, and 80% by 2050.
Beyond Europe, the UK ETS (from 2026), Türkiye’s forthcoming framework, and South Korea’s ETS are adding layers to the regulatory landscape. Meanwhile, Africa’s Sovereign Carbon Initiative is advancing, with Djibouti and Gabon already applying carbon levies and several other African countries exploring similar measures.
If additional schemes follow and are priced at “EU level (USD 180 per tonne CO2), the cumulative carbon cost for shipping could exceed USD 100 billion annually by 2030, assuming a business as usual scenario).
Though the UAE’s proposal remains non-binding, it represents an important moral and political signal to the industry. Still, uncertainty persists about how these frameworks will interact in practice, especially as some countries have already allocated emissions-related revenue in their national budgets.
Day 2 became procedural when delegations debated whether to adopt the MARPOL amendments through tacit or explicit acceptance, a technical question with significant political implications. Since 1973, the IMO has used the tacit acceptance procedure, meaning that if the amendment is adopted by a two-thirds majority during the meeting, a ten-month period begins. During this time, if States representing 50% of the world’s merchant fleet tonnage object, the amendment will not enter into force.
The explicit acceptance procedure, on the other hand, would require a specified number or percentage of Parties to formally accept the amendment before it could enter into force, a process that could take several years. Even the IMO’s own website notes that amendments adopted under this procedure rarely, if ever, enter into force.
The United States and Saudi Arabia requested that the explicit acceptance procedure be applied. As a result, the drafting group included both procedures in the revised text, with the decision deferred to Day 4 of the meeting.
Day 3 saw slow progress as pleanary struggled to reconcile positions.
Day 4 opened with the expectation of reviewing the Working Group report (on the UAE proposal on carbon pricing), followed by the formal approval of the Drafting Group text (regarding the tacit vs. explicit acceptance procedures) and a vote on the adoption of the NZF.
Instead, a series of motions and procedural challenges emerged, this time from Brazil, Singapore, Saudi Arabia, Denmark, and the United States. The atmosphere quickly became complex: interventions overlapped, and multiple points of order were raised.
Saudi Arabia, supported by Russia, formally moved to suspend the session for one year, citing the need for further consultation and consensus. The motion passed with 57 votes in favour, 49 against, 21 abstentions, and 8 absent.
As a result, the adoption of the MARPOL Annex VI amendments under the NZF has been postponed, with discussions expected to resume during MEPC/ES.3 in October 2026.
While the IMO process is paused, regulatory momentum at regional and national levels continues to accelerate. The EU ETS and FuelEU Maritime will both be reviewed in 2026/2027, though neither is likely to scale back. The UK ETS remains on track for 2026, and new regional systems in Türkiye and Africa are advancing.
Meanwhile, the 2023 IMO GHG Strategy remains in force, meaning that short-term measures such as CII and EEXI could be further tightened to keep the IMO aligned with its 2030 and 2040 targets.
Even with regulatory uncertainty, one message is clear: the world will not wait. Regional and national carbon measures are moving full steam ahead, and stakeholders who actively manage their emissions will gain a competitive advantage.
At Siglar Carbon, we believe that data-driven carbon intelligence will become as critical as market intelligence. By quantifying, forecasting, and managing carbon exposure, companies can turn regulatory challenges into strategic and commercial opportunities. In the decade ahead, success in shipping will depend not only on operational efficiency but also on how effectively emissions data are understood and acted upon. The recent MEPC ES highlighted both the difficulty and the necessity of achieving alignment on decarbonisation. While that process may take time, the trajectory is set, and companies that prepare now will be best positioned to lead the transition.
