The IMO Takes Historic Step Towards Net-Zero Emissions Framework

In April, the IMO member states took a historic step by agreeing to the Net-Zero Framework (NZF) – the world’s first global emissions price for an entire industry. This framework marks a significant milestone in the global efforts to combat climate change.

Support from the International Chamber of Shipping

The International Chamber of Shipping (ICS) fully supports the NZF, recognizing its importance in driving the shipping industry towards a more sustainable future. However, shipowners have expressed concerns about the potential complexity of the new rules, especially for smaller to medium-sized companies who may struggle with compliance costs.

While the focus has primarily been on the penalties for emissions (‘the sticks’), the ICS emphasizes the importance of clear incentives (‘the carrots’) for cleaner fuels. These incentives will play a crucial role in motivating fuel producers to deliver the new fuels and infrastructure needed for shipping to meet the ambitious emissions targets.

Clarity and Certainty Needed

Governments must swiftly establish clear standards for cleaner fuels to provide reassurance to fuel producers and encourage investments in green fuel infrastructure. The upcoming IMO meeting in October is expected to adopt these measures and provide details on how these incentives will function.

Thomas A. Kazakos, ICS Secretary General, highlighted the importance of formal adoption of the Net-Zero Framework by the IMO in October to provide a clear signal to the industry and incentivize the production of cleaner fuels. Industry stakeholders require clarity, simplicity, and detailed information on the rewards to make informed investment decisions.

Call for Harmonization

ICS has submitted proposals to the IMO to address key issues, including a request to replace the word ‘may’ with ‘shall’ to ensure a more decisive signal to the market. Additionally, ICS has responded to the EU Commission’s consultation, urging them to replace the EU Emissions Trading System (ETS) with the IMO NZF once adopted to ensure a unified and transparent system for the shipping industry.

Harmonization of regulations and incentives is crucial for the shipping industry to successfully transition to net zero emissions within the set timeframes. Clear and simple rules will facilitate the rapid adoption of cleaner technologies and fuels across the sector.

The IMO’s Net-Zero Framework represents a significant milestone in the global efforts to decarbonize the shipping industry. With continued collaboration and commitment from all stakeholders, the industry can work towards a more sustainable and environmentally friendly future.