Policy & Compliance
IMO reaches agreement on reducing greenhouse gases
Although a framework agreement has been reached there is widespread dissatisfaction with the proposals, with ship operators and environmentalists holding opposing views. The proposals have to be rati fi ed by the International Maritime Organisation in October
The long-term aim will be to reduce GHG emissions to “net-zero by or around 2050”. Some feel that the “on or around” gives the shipping lines too much latitude in transitioning to low carbon fuels. However, there are milestones to be met and costs for not meeting them. The framework sets a ‘base target’ and a ‘direct compliance target’ (DCT). Ships with a GHG intensity higher than the baseline carbon target will have to pay a penalty of $380 per tonne of CO 2 equivalent emitted, and for those exceeding the ‘compliance target’ a charge of $100 per tonne of CO 2 equivalent emitted will be imposed. These charges will be collected via a yet-to-be-agreed mechanism operated by the IMO. Vessels with a GHG intensity below the DCT will pay no fees and instead generate credits called surplus units (SU), which can be
T he International Maritime Organisation (IMO) has achieved an important step towards establishing a legally binding framework to reduce greenhouse gases (GHG) from the maritime sector. The framework is a global first, including mandatory emissions limits and GHG pricing across an entire sector. This reflects the global nature of maritime, which carries 90% of world trade emitting 3% of global GHG emissions. The measure, which is due to be formally adopted in October this year, will become mandatory for all vessels over 5,000 gross tons. Oceangoing vessels exceeding
this weight limit emit 85% of the total CO 2 emissions for international shipping. Last-minute vote The IMO meetings usually try to achieve a consensus, but this was not possible on this occasion. A last-minute vote passed the framework agreement by 63 to 16 votes, with many of the 175 members abstaining. BIFA and many international transport-focused associations had been in favour of the original proposal to impose a flat rate levy on emissions, but this was rejected early in the final negotiations.
16 | June 2025
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