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Our CDO, Geir Olafsen, recently contributed a commentary to the ESG special edition of the Norwegian newspaper, Finansavisen. He offered a clear-eyed view of why global climate action in shipping is stalling at the IMO and how regional initiatives, especially in the EU, are now shaping the path forward. To make these insights accessible to our international audience, we’re sharing an English version of his perspective on the regulatory shifts that will define the future of maritime decarbonisation.
At the meeting of the UN’s maritime body, the International Maritime Organization (IMO), in September, all the conditions seemed to be in place to adopt a global levy on greenhouse gas emissions from international shipping. That did not happen, and it now appears that shipping has stepped back from the climate fight just as the pace was meant to accelerate.
IMO processes are notoriously slow, but once regulations are adopted, they have global reach. This was precisely why the Net Zero Framework (NZF), the proposed global levy and support mechanism for shipping, represented a critical crossroads. In hindsight, it is clear that the preparatory work was insufficient, and several countries withdrew their support. No decision was taken in London other than to postpone the entire process by one year.
It is difficult to point to a single cause, but I believe the following factors explain the lack of genuine support for the NZF:
The EU has not stepped out of the climate fight. From 1 January 2024, shipping was included in the EU Emissions Trading System. This implies an additional combined cost this year of around USD 6 billion for vessels trading to and from Europe, a cost that will increase further in 2026 and beyond. An additional USD 1 billion per year is being collected from 2024 through the FuelEU Maritime regulation, which sets requirements for improved emissions intensity of the fuels used by ships.
That said, the EU’s reach is limited. Around 25% of the global fleet regularly trades to Europe. The key question is therefore to what extent others will follow suit, now that the IMO appears to be showing limited decisiveness.
The United Kingdom will include domestic shipping in its emissions trading system from next year. Türkiye is planning similar measures, while Djibouti and Gabon have already introduced CO₂ levies on import and export voyages.
The big question, then, is: is there more to follow?
The potential to raise significant revenues is substantial. By 2030, the EU and the other regimes mentioned are expected to collect around USD 20 billion, out of a total potential of USD 80 –120 billion if all global shipping emissions were priced at similar levels. The IMO NZF would, in comparison, be significantly cheaper, around USD 33 billion, in addition to the share that is intended to be returned to shipping from the NZF fund.
Despite the breakdown in London, there are strong arguments suggesting that the IMO eventually will agree on a global framework:
For IMO member states, which in practice represent the world’s shipowners, this is an opportunity to ensure that collected emissions levies are earmarked for solving the technical challenges that must be addressed to make shipping emissions-free. The alternative is likely a patchwork of regional and national schemes and levies.
In other words: either the IMO succeeds, or the path towards carbon-neutral shipping becomes more fragmented, more complex, and almost certainly more expensive than it needs to be.
Our CDO, Geir Olafsen, recently contributed a commentary to the ESG special edition of the Norwegian newspaper, Finansavisen. He offered a clear-eyed view of why global climate action in shipping is stalling at the IMO and how regional initiatives, especially in the EU, are now shaping the path forward. To make these insights accessible to our international audience, we’re sharing an English version of his perspective on the regulatory shifts that will define the future of maritime decarbonisation.
At the meeting of the UN’s maritime body, the International Maritime Organization (IMO), in September, all the conditions seemed to be in place to adopt a global levy on greenhouse gas emissions from international shipping. That did not happen, and it now appears that shipping has stepped back from the climate fight just as the pace was meant to accelerate.
IMO processes are notoriously slow, but once regulations are adopted, they have global reach. This was precisely why the Net Zero Framework (NZF), the proposed global levy and support mechanism for shipping, represented a critical crossroads. In hindsight, it is clear that the preparatory work was insufficient, and several countries withdrew their support. No decision was taken in London other than to postpone the entire process by one year.
It is difficult to point to a single cause, but I believe the following factors explain the lack of genuine support for the NZF:
The EU has not stepped out of the climate fight. From 1 January 2024, shipping was included in the EU Emissions Trading System. This implies an additional combined cost this year of around USD 6 billion for vessels trading to and from Europe, a cost that will increase further in 2026 and beyond. An additional USD 1 billion per year is being collected from 2024 through the FuelEU Maritime regulation, which sets requirements for improved emissions intensity of the fuels used by ships.
That said, the EU’s reach is limited. Around 25% of the global fleet regularly trades to Europe. The key question is therefore to what extent others will follow suit, now that the IMO appears to be showing limited decisiveness.
The United Kingdom will include domestic shipping in its emissions trading system from next year. Türkiye is planning similar measures, while Djibouti and Gabon have already introduced CO₂ levies on import and export voyages.
The big question, then, is: is there more to follow?
The potential to raise significant revenues is substantial. By 2030, the EU and the other regimes mentioned are expected to collect around USD 20 billion, out of a total potential of USD 80 –120 billion if all global shipping emissions were priced at similar levels. The IMO NZF would, in comparison, be significantly cheaper, around USD 33 billion, in addition to the share that is intended to be returned to shipping from the NZF fund.
Despite the breakdown in London, there are strong arguments suggesting that the IMO eventually will agree on a global framework:
For IMO member states, which in practice represent the world’s shipowners, this is an opportunity to ensure that collected emissions levies are earmarked for solving the technical challenges that must be addressed to make shipping emissions-free. The alternative is likely a patchwork of regional and national schemes and levies.
In other words: either the IMO succeeds, or the path towards carbon-neutral shipping becomes more fragmented, more complex, and almost certainly more expensive than it needs to be.
