Shipping: On the verge of critical consultations on the issue of Net Zero

source: IMO

The shipping industry stands at a pivotal moment as it faces urgent decisions that will shape its future in the race to reduce emissions. The International Maritime Organization (IMO) has restarted discussions on a global green shipping strategy, while the European Commission is reviewing how the Emissions Trading System (ETS) applies to shipping. These developments come amid growing pressure to achieve net zero emissions and maintain a level playing field for shipowners worldwide.

The IMO’s Renewed Push for Global Dialogue

At a recent press conference in London, IMO Secretary-General Arsenio Dominguez announced plans to engage all stakeholders in talks aimed at breaking the current deadlock over the global framework for zero emissions. The shipping sector has struggled to agree on clear targets and measures, leading to delays in adopting the IMO’s Net Zero framework, which was postponed by a year last October.

Dominguez emphasized that the process is at a critical stage. Political dialogue and compromise are essential to keep the industry’s international ambitions alive. Without consensus, the risk grows that fragmented regulations could emerge, complicating compliance and undermining global efforts to decarbonize shipping.

The European Commission’s Review of ETS in Shipping

Parallel to the IMO’s efforts, the European Union is reviewing its approach to the ETS as it applies to shipping. The ETS requires companies to hold allowances for their carbon emissions, effectively putting a price on pollution. The EU’s plan includes using revenues from ETS to support environmental goals in the sector.

European officials have clarified that their goal is not to tighten regulations prematurely but to align existing rules with any global framework the IMO adopts. This approach aims to prevent shipping companies from facing a double burden—paying under both the EU’s ETS and potential global measures. The review seeks to maintain environmental objectives while protecting the competitiveness of European shipowners and ports.

Balancing Environmental Goals and Industry Competitiveness

One of the main challenges in shaping the future of shipping regulations is balancing environmental ambition with economic realities. The EU wants to avoid situations where stricter rules in Europe push shipping activities to other regions with looser standards, a phenomenon known as carbon leakage.

To address this, the EU’s strategy focuses on adapting its legislation to fit within a global framework rather than imposing additional constraints. This alignment would help ensure that European and international shipowners operate under comparable rules, supporting fair competition and reducing the risk of market distortions.

What the Future Holds for Shipping Decarbonization

The upcoming months will be crucial for the shipping industry. The IMO’s renewed consultations could lead to a clearer, unified path toward net zero emissions. Meanwhile, the EU’s review of the ETS will determine how regional policies interact with global efforts.

Stakeholders should watch for:

• Progress in IMO negotiations: The willingness of countries and industry players to find common ground will influence the strength and scope of the global framework.

• Adjustments in EU ETS rules: Changes may reflect the outcome of IMO talks, aiming to avoid overlapping regulations.

• Technological and operational innovations: Advances in fuel types, vessel design, and operational efficiency will play a key role in meeting emissions targets.

  
  

Practical Implications for Shipowners and Ports

Shipowners and port operators should prepare for evolving regulations by:

• Monitoring developments at the IMO and EU levels to anticipate changes.

• Investing in cleaner technologies such as alternative fuels (e.g., green ammonia, hydrogen) and energy-efficient ship designs.

• Engaging with policymakers and industry groups to represent their interests and share practical insights.

• Planning for compliance costs and potential shifts in market dynamics due to regulatory changes.

  
  

Final Thoughts

The shipping industry is at a crossroads where decisions made soon will impact its environmental footprint and economic viability for years to come. The IMO’s efforts to restart dialogue and the EU’s review of ETS rules reflect a shared commitment to decarbonization, but success depends on cooperation and balanced policies.

John Tseles