- The EU has expanded its Emissions Trading System to cover large vessels, aiming for full implementation by 2027.
- The IMO plans to introduce global carbon pricing in 2027, with penalties for ships that miss fuel intensity targets.
- Although global rules are seen as less aggressive, they mark a key step toward standardizing maritime decarbonization.
- Greener shipping helps reduce scope 3 emissions across industries and supports broader climate goals in global trade.
Maritime transport moves around 80% of global trade by volume, yet it generates over 10% of the transport sector’s total CO2 emissions. Liquified natural gas offers a temporary reduction in emissions compared to heavy fuel oil, but it’s not a long-term solution. Alternatives like green ammonia and biofuels are gaining attention, though scaling them and implementing energy-saving strategies remains a major hurdle, as outlined by AllianzGI.
Regulatory Momentum Builds Toward Decarbonizing Shipping
Europe has taken the lead in maritime decarbonization, expanding its Emissions Trading System (EU ETS) in January 2024 to include vessels over 5,000 gross tonnage. The system, based on a cap-and-trade model, sets emission limits while allowing companies to trade emission allowances. Data collection efforts are already underway to fully implement the system by 2027.
On a global level, the International Maritime Organization (IMO) is moving toward carbon pricing for large ships. A final decision is expected in October 2025. From 2027, vessels that fail to meet annual greenhouse gas fuel intensity targets will be required to purchase “remedial units,” which come at a higher cost than EU ETS credits. This creates a financial incentive for compliance, though some critics argue the IMO’s approach falls short compared to more ambitious frameworks.
Despite this, the introduction of a global decarbonization benchmark is a meaningful step forward. Lowering shipping emissions also supports emission reductions in other sectors, especially manufacturing, by cutting scope 3 emissions linked to global supply chains. Still, broader progress will depend on similar climate commitments from aviation and road transport. Increased investment and responsible corporate engagement can help maintain momentum in the transition to greener global trade.
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Source: AllianzGI
