IMO Holds Line on Net-Zero Shipping Plan Amid Growing Pushback

Global shipping rules survive US opposition at latest talks

The International Maritime Organization has kept its Net-Zero Framework alive as the basis for future negotiations on shipping emissions. Delegates at the Marine Environment Protection Committee meeting agreed to maintain the framework despite sustained opposition from the United States and several allied nations. The decision preserves a path toward net-zero emissions by 2050, though the delay adds uncertainty for businesses planning investments in cleaner vessels and fuel infrastructure.

This matters because shipping accounts for roughly 3% of global greenhouse gas emissions. Most UK manufacturers and importers rely on maritime transport for international trade. Regulatory clarity affects freight costs, supply chain planning, and the availability of low-carbon shipping options. The framework proposes two mechanisms: a fuel intensity standard covering the full lifecycle of marine fuels, and a pricing system where higher-polluting vessels pay into a fund while cleaner operators earn credits.

The framework was initially due for formal adoption in October 2025. However, member states postponed the vote by 12 months after failing to reach consensus. Consequently, shipowners and fuel suppliers face continued uncertainty about compliance requirements and investment priorities.

What the Net-Zero Framework proposes for shipping

The IMO revised its greenhouse gas strategy in July 2023. Member states committed to net-zero emissions from international shipping by or around 2050. Interim targets include at least a 20% reduction by 2030, with an ambition to reach 30%. The strategy also calls for accelerated uptake of zero or near-zero emission fuels during this decade.

The Net-Zero Framework translates these commitments into enforceable rules. Drafted in April 2025, the framework amends the MARPOL treaty to introduce specific compliance mechanisms. The fuel intensity standard applies on a well-to-wake basis, measuring emissions from fuel production through to combustion. This differs from previous rules that only counted emissions from the ship’s funnel.

The pricing mechanism targets vessels over 5,000 gross tonnage, covering approximately 85% of the sector’s emissions. Non-compliant ships would pay charges based on their emissions intensity. These payments flow into a Net-Zero Fund intended to support research, infrastructure development, and equitable transitions for developing nations. Meanwhile, operators of low-emission vessels earn tradable credits, creating a financial incentive for early adoption of cleaner technologies.

Originally, the framework was scheduled for adoption at the October 2025 meeting in London. Entry into force was planned for 2027, giving the industry roughly 18 months to prepare. However, the vote was deferred after negotiations revealed deep divisions among member states. The framework remains under discussion, with technical working groups continuing their development of implementation guidelines.

Opposition from the US and economic concerns

In August 2025, the US administration issued a joint statement from four cabinet secretaries opposing the framework. The statement characterized the proposals as harmful to American commercial interests and threatened tariffs against nations that supported the measures. This marked an escalation beyond typical negotiating positions at the IMO.

The US objections center on several concerns. Officials argue that zero-emission marine fuels remain scarce and prohibitively expensive. Green methanol, ammonia, and hydrogen face infrastructure gaps and supply constraints. The administration contends that imposing costs on shipping before viable alternatives exist would harm trade competitiveness. They estimate compliance could increase shipping costs by more than 10%, though independent analysts dispute this figure.

Saudi Arabia and several other oil-producing nations joined the US position. Their concerns relate to the well-to-wake measurement approach, which accounts for emissions from fuel extraction and refining. This methodology disadvantages conventional marine fuels compared to rules that only measure combustion emissions. Additionally, flag states with large shipping registries, including Greece, Malta, and Cyprus, signaled potential abstentions over concerns about competitive impacts on their fleets.

At the October 2025 meeting, these divisions prevented adoption. The IMO operates on consensus for major regulatory changes, and the depth of opposition made a vote untenable. Delegates agreed to postpone the decision for 12 months, maintaining the framework as the foundation for continued talks. IMO Secretary-General Arsenio Dominguez stated the proposals remain “very much alive” and urged member states to rebuild trust during the delay period.

Commercial implications for UK businesses

The delay creates planning challenges for companies that rely on maritime shipping. Freight forwarders and logistics providers lack clarity on future compliance costs. This affects contract negotiations and long-term rate agreements. Without confirmed regulations, carriers cannot finalize surcharge structures or investment plans for fleet upgrades.

Shipowners face difficult decisions about vessel orders. New ships have operational lifespans of 20 to 30 years. Ordering a conventionally fueled vessel today risks stranded assets if regulations tighten before 2030. However, specifying dual-fuel or alternative propulsion systems adds significant capital costs. The uncertainty discourages these investments, potentially slowing fleet modernization across the industry.

Fuel suppliers and port operators also need regulatory certainty to justify infrastructure investments. Bunkering facilities for green methanol or ammonia require substantial capital expenditure. Without confirmed demand driven by regulations, these projects struggle to secure financing. Similarly, UK ports considering shore power installations or hydrogen refueling capabilities face unclear business cases.

For manufacturers and importers, the situation affects supply chain planning in several ways. Firstly, the eventual adoption of emissions pricing will likely increase freight rates. Companies should model these potential cost increases in their supply chain strategies. Secondly, buyers may face pressure to demonstrate lower supply chain emissions, particularly for public sector contracts where PPN 06/21 requires carbon reduction plans. Choosing shipping routes and carriers based on emissions performance may become a competitive differentiator.

The fragmented regulatory landscape adds complexity. The EU Emissions Trading System already applies to shipping emissions within European waters. From 2024, vessels calling at EU ports must surrender allowances for a portion of their emissions. This creates different compliance requirements depending on trade routes. UK businesses trading with both EU and non-EU markets must navigate multiple frameworks, increasing administrative costs and complexity.

There are also risks of competitive distortions. If the IMO framework eventually enters force without US participation, American-flagged vessels might operate under different rules. This could create cost advantages or disadvantages depending on trade patterns. Similarly, nations that move ahead with unilateral measures may see their shipping industries face higher costs than competitors in countries that delay implementation.

Critical details for business planning

Several key facts should inform your supply chain and compliance planning over the next 18 months. The framework targets vessels above 5,000 gross tonnage, which handles the vast majority of containerized freight and bulk cargo. Smaller coastal vessels and domestic shipping would initially remain outside the regulations.

The well-to-wake measurement approach differs fundamentally from existing rules. It captures emissions from the entire fuel lifecycle, including extraction, refining, and transportation of marine fuels. Consequently, even ships using the same fuel type may have different compliance obligations depending on fuel sourcing and supply chains.

Implementation was originally planned for 2027, though the 12-month delay makes 2028 more realistic. However, this assumes member states reach consensus at the next key meeting. Further delays remain possible if divisions persist. The IMO typically requires ratification by a minimum number of member states before treaties enter force, adding months between adoption and actual compliance requirements.

The pricing mechanism includes both charges for excess emissions and credits for low-emission operations. This creates potential for trading systems similar to carbon markets. Early movers investing in cleaner vessels could generate revenue by selling credits to higher-emitting competitors. The financial incentives favor companies that invest in fleet modernization ahead of regulatory deadlines.

Developing nations receive special consideration under the framework. The Net-Zero Fund specifically directs resources toward countries that lack financial capacity for rapid fleet transitions. This aims to prevent the rules from disproportionately harming trade for less wealthy nations. Nevertheless, the distribution mechanisms remain under negotiation, and the fund’s effectiveness depends on the volume of payments collected.

What businesses should consider now

Despite the regulatory uncertainty, several practical steps can help UK businesses prepare for eventual emissions rules. Firstly, review your current freight emissions and supply chain structure. Many companies lack visibility into the carbon intensity of their shipping arrangements. Understanding your baseline position enables better planning as regulations develop.

Consider engaging with freight forwarders about emissions data. Leading carriers increasingly provide vessel-level emissions information. This transparency allows you to compare options and make informed decisions. For businesses with significant shipping volumes, specifying lower-emission vessels in tender requirements may become standard practice, particularly for public sector suppliers.

Assess exposure to potential freight cost increases. If regulations add 5-10% to shipping costs, how does this affect product margins and competitiveness? Businesses with tight margins on imported goods should model these scenarios. Similarly, companies with long-term freight contracts should consider how renegotiations might incorporate emissions-related surcharges.

Supply chain diversification may offer resilience. Over-reliance on single trade routes or shipping providers creates vulnerability to regulatory changes. Businesses that maintain flexibility in sourcing and logistics can adapt more quickly as rules evolve. However, diversification carries its own costs and should be weighed against other risk factors.

For businesses in sectors with significant shipping emissions, carbon reduction planning becomes increasingly important. Public sector suppliers must demonstrate credible carbon reduction plans under PPN 06/21. Private sector companies face growing investor and customer pressure on Scope 3 emissions. Shipping typically represents a material component of supply chain emissions for manufacturers and retailers relying on imported goods or materials.

Training and capability building help organizations respond effectively to evolving requirements. Understanding maritime emissions accounting, fuel options, and compliance mechanisms allows better engagement with carriers and forwarders. We offer training through the SBS Academy that covers supply chain emissions and sustainable procurement strategies relevant to shipping and logistics.

Looking ahead, the regulatory landscape will likely remain fragmented for several years. The EU system already operates, and other regions may implement their own measures if the IMO framework stalls. Businesses operating internationally should prepare for multiple compliance frameworks rather than a single global standard. This complexity favors organizations with strong environmental management systems and clear governance for supply chain emissions.

Where to find authoritative guidance

The International Maritime Organization publishes official documents and meeting outcomes on its website. The MEPC section contains detailed technical papers, including the full text of the revised greenhouse gas strategy adopted in July 2023. These documents provide the most authoritative source for understanding the framework’s technical specifications and member state positions.

The UK government’s Department for Transport maintains guidance on maritime emissions regulations and their implications for British businesses. Their publications explain how international rules interact with domestic policy and the UK’s net-zero commitments. The department also provides updates on the UK’s position in IMO negotiations.

For businesses focused on supply chain emissions, the Smart Freight Centre offers resources on calculating and reducing shipping emissions. Their GLEC framework provides standardized methodologies that align with international accounting standards. This helps ensure consistency in emissions reporting across different carriers and routes.

We support businesses navigating these regulatory changes through our sustainable procurement service, which addresses supply chain emissions and compliance requirements. For companies requiring carbon accounting and reporting, particularly for public sector contracts, our compliance support covers Scope 3 emissions measurement and carbon reduction plan development.