After more than a decade of negotiation, the International Maritime Organization (IMO) has taken a decisive step toward decarbonising the global shipping industry. On Friday 11th April 2025, the IMO approved a long-awaited Net-Zero Framework, which will require all ships to pay for the greenhouse gases they emit – starting in 2028.

This landmark decision introduces a global mechanism for levying emissions, making shipping the first sector to adopt internationally enforceable emissions limits. Vessels will face charges based on their greenhouse gas output and will also be allowed to trade carbon credits with other operators. This hybrid approach of levies and carbon trading is designed to reduce emissions across the sector while giving shipowners some flexibility in how they meet their targets.

The framework has not been without controversy. Major oil-exporting countries such as Saudi Arabia, Russia, and the UAE opposed the deal, while many climate-vulnerable nations expressed disappointment that revenues from the levies will not directly fund adaptation efforts in the Global South. Countries like Tuvalu and the Marshall Islands, which have been vocal advocates for stronger action, are expected to push harder for equity measures at the next IMO meetings in October.

Despite the compromises, this framework represents a critical breakthrough. Until now, many decarbonisation efforts – such as those arising from the European Green Deal – have been confined to regional jurisdictions. The IMO’s new framework is the first to create a global financial incentive to reduce emissions across an entire sector.

As the shipping industry accounts for nearly 3% of global greenhouse gas emissions, the significance of this agreement cannot be overstated. With the 2028 implementation date on the horizon, shipowners, cargo operators, and financiers must begin adapting their strategies now – investing in cleaner technologies, reviewing fleet efficiency, and preparing for the operational and economic realities of a carbon-priced future.

The road ahead will require collaboration, innovation, and continued pressure from both regulators and climate-vulnerable nations. But the message is clear: the age of unpriced shipping emissions is coming to an end.

Reina Maria van Pallandt

Reina Maria van Pallandt is a senior disputes resolution lawyer with dual British and Dutch nationality. After obtaining an LLB Honors degree in Dutch Law and Public International Law at the University of Amsterdam (UvA), Reina Maria studied International Law of the Sea at London School of Economics (LSE).

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