In a landmark move to curb greenhouse gas emissions from the maritime sector, the International Maritime Organization (IMO) has secured agreement from 63 countries, including India, China, and Brazil, to implement the first-ever global carbon pricing mechanism for international shipping. The framework, known as the “IMO Net-Zero by 2050 Framework,” was approved during the Marine Environment Protection Committee’s 83rd session in London and is set to take effect in 2027, with formal adoption anticipated in October 2025.
Under the new regulations, vessels exceeding 5,000 gross tonnage—responsible for approximately 85% of CO₂ emissions from international shipping—will be subject to a dual-tiered fee structure starting in 2028. Ships burning conventional fossil fuels will incur a $380 per tonne fee on the most intensive portion of their emissions and a $100 per tonne fee on remaining emissions above a specified threshold. This initiative aims to incentivize the transition to lower-carbon fuel alternatives and is expected to generate between $30 billion and $40 billion in revenues by 2030, with funds earmarked for supporting the shift to cleaner shipping technologies and assisting developing nations in this transition.
Despite the agreement’s historic nature, it has faced criticism from environmental groups and climate-vulnerable nations for lacking sufficient ambition. Analyses suggest the framework may only achieve a 10% absolute emissions reduction in the shipping sector by 2030, falling short of the IMO’s own targets established in their 2023 revised strategy. Transport & Environment, a clean transport think tank, projects a 60% emissions reduction by 2040 under the current framework, which may not suffice to meet the net-zero goal by 2050.
The agreement saw opposition from petro-states such as Saudi Arabia, the UAE, Russia, and Venezuela, while the United States withdrew from the talks, expressing concerns over potential economic impacts and indicating it would consider “reciprocal measures” against any fees imposed on U.S. ships.
India’s participation in endorsing the framework marks a significant step, especially considering its earlier reservations about similar carbon taxation measures. Finance Minister Nirmala Sitharaman had previously criticized the European Union’s proposed Carbon Border Adjustment Mechanism, labeling it as “not moral” and contrary to the interests of developing countries.
The shipping industry, accounting for about 3% of global greenhouse gas emissions, has historically been excluded from international climate agreements like the Paris Accord. This new global tax represents a pivotal effort to integrate maritime emissions into the broader climate change mitigation agenda.
As the world moves towards implementing this framework, the focus will be on refining the measures to ensure they effectively drive the maritime sector towards decarbonization while addressing the concerns of developing nations and vulnerable economies.
