Loss of IMO net zero scheme can spur better decarbonisation strategies

Any proposed emissions-reduction system needs to provide incentives, not just penalties. 

Whilst the postponement of the International Maritime Organization’s (IMO) Net Zero Framework in October 2025 last year frustrated some, the coming months also offer an opportunity to ensure a global structure is developed that takes account of the true availability of alternative fuels and transformational technology.

The planet still requires shipping and other industries to cut emissions. However, questions remain over whether the IMO Net Zero Framework could penalise shipowners when alternative fuel choices are still not readily available or economically feasible to introduce.

Nevertheless, it remains essential that we don’t throw the baby out with the bathwater because European measures continue to proliferate, whilst the possibility of differing schemes being set up in China and elsewhere could also distort fair competition.

European Union (EU) measures, like the Emission Trading System (ETS) and FuelEU Maritime, are well-meaning and have their benefits, but they risk creating competitive disadvantages for EU-linked fleets. These are the type of market distortions which encourage some to seek workarounds – some legitimate and some otherwise – and the type of ‘carbon leakage’ that undermines the aim of the schemes.

With common goals in view, it is imperative that we all work together with the IMO to find pragmatic and truly workable solutions that help shipping cut its emissions, whilst also reflecting the industry’s global nature.

And it is crucial that ship-owning companies are also heard. We are major investors in the business of global trade movement, not passive beneficiaries seeking to avoid paying our dues. 

We are also the very investors most compromised by lack of regulatory clarity: How can we decide what fuels or technologies to invest in if the shape, speed, and reach of regulations are in doubt?

One clear takeaway from events at IMO earlier this year is that any market-based measure, such as a levy on carbon fuels, must be geared to ensure revenues are recycled with transparency into the R&D we truly need. Our global industry cannot accept the risk that national or regional levies could be hijacked for purposes.

Any proposed emissions-reduction system also needs to provide incentives, not just penalties, to support first movers and establish risk-sharing mechanisms, and develop public-private partnerships to support alternative fuel infrastructure. Here, too, alignment between the EU and the IMO will be critical – in this case, on timelines. 

In Arsenio Dominguez, there is an IMO Secretary-General in post who has been prepared to listen to the critics after the vote to postpone a decision on the Net Zero scheme in October 2025. As he has pointed out, despite the unexpected vote, many of the biggest shipping companies across the world continue to expand their commitment to alternative fuel-ready vessels.

Even some of the most enthusiastic champions of the Net Zero Framework were ready to accept that the measure brought to the IMO was imperfect. 

In this light, its postponed progress is not a disaster that leaves the shipping industry adrift, but an opportunity to develop global policies to cut ship emissions that are grounded in realism, so that maritime transport finds a practical path to transforming the fleet ahead of 2050.