International shipping will now be subject to a carbon pricing mechanism to enter force in 2028, as part of ambitions to make the sector net-zero by around 2050, Kallanish reports.

The International Maritime Organization (IMO) announced Friday its Marine Environment Protection Committee approved the draft amendments to the net-zero framework after long negotiations. Member states met in London to discuss finalising terms that will steer international shipping towards carbon neutrality over the next 25 years.

The mechanism agreed reportedly includes two emission thresholds. Large international vessels will be required to increase their use of less carbon-intensive fuels or face a penalty of up to $380/tonne of CO2 emission they emit. The initial threshold starts at a lower baseline of $100/t.

At the time of writing, the IMO had not officially released full details of the amendments.

The final text, which was agreed upon by a vote called by Saudi Arabia, will be put forward for adoption in October, for implementation in 2027. It also includes the creation of a fund for disbursing revenues, a global fuel standard that accounts for the full lifecycle emissions of maritime fuels and a measure to ensure ships are more energy efficient, explains advocacy group Environmental Defense Fund (EDF).

“By approving a global fuel standard and greenhouse gas pricing mechanism, the International Maritime Organization took a crucial step to reduce climate impacts from shipping,” comments EDF’s Natacha Stamatiou. “Member states must now deliver on strengthening the fuel standard over time to more effectively incentivise the sector’s adoption of zero and near-zero fuels, and to ensure a just and equitable energy transition.”

Campaign group T&E warns that the measure, which promotes the use of agricultural-based biofuels, “falls short of delivering IMO’s own decarbonisation targets” set only two years ago. In 2023, the IMO committed to reaching net-zero greenhouse gas emissions by 2050 and deliver up to 30% and 80% emission cuts by 2030 and 2040, respectively.

The meeting in London was expected to set clear and binding regulations to support countries in achieving these milestones. T&E estimates the measure would “at best” deliver a 10% emission reduction by 2030, 60% by 2040 and “fail to reach net-zero by 2050.”

“Without better incentives for sustainable e-fuels from green hydrogen, it is impossible to decarbonise this heavy polluting industry. The ball is now in the court of individual countries to implement national policies to open a lifeline to green e-fuels,” adds Faig Abbasov, shipping director at T&E.

Some observers estimate the carbon pricing system, which could raise revenues of $30-40 billion by 2030, could pave the way for similar adoption in other sectors, such as aviation.