- 2025 is a crucial year for maritime GHG regulations.
- IBIA supports an IMO GHG fund to bridge the cost gap for alternative fuels.
- The fund would incentivize low-emission fuels and support innovation.
- A combined regulatory and financial approach ensures effective decarbonization.
IBIA recognizes that 2025 marks a crucial milestone in regulating greenhouse gas (GHG) emissions from international shipping. Fully respecting the perspectives of all IMO Member States, IBIA reiterates its support for a maritime GHG emissions pricing mechanism. This mechanism would involve the adoption of an IMO GHG fund, which would play a critical role in facilitating a just transition towards decarbonization by supporting alternative fuel infrastructure for production and supply.
The Role of an IMO GHG Fund in Fuel Transition
IBIA considers an IMO GHG fund to be the most effective approach to bridging the cost gap between traditional fossil fuels and the alternative zero and net-zero fuels required for shipping to meet the targets of the 2023 IMO GHG Strategy. By implementing a pricing mechanism such as a levy or fee, shipping companies would be incentivized to transition to low-emission fuels. The revenue generated through this fund would then be allocated transparently to stimulate innovation, research, and development of alternative fuels, as well as to support other needs identified by Member States.
Confidence in IMO’s Ability to Govern the Fund
IBIA acknowledges the concerns raised by some IMO Member States regarding the governance of a potential GHG fund. However, IBIA expresses confidence in the IMO’s well-established expertise in successfully managing financial mechanisms and trusts in the ability of the Secretary-General and IMO staff to administer the fund effectively.
Complementing the Global GHG Fuel Standard
IBIA supports a two-pronged approach, where the IMO GHG fund complements the proposed global GHG Fuel Standard. While the technical element—the fuel standard—would set a goal-based mandate for transitioning to zero or net-zero GHG emission fuels, the financial mechanism would provide incentives and resources to accelerate this transition. Together, these measures would create a comprehensive framework for reducing lifecycle GHG emissions from international shipping.
Ensuring a Just and Equitable Transition
Beyond regulatory compliance, IBIA emphasizes that the transition to low-emission shipping should be equitable, ensuring that no region or industry sector is left behind. The 2023 IMO GHG Strategy must establish financial incentives and dedicated resources to support the global fleet in achieving its emission reduction targets. IBIA underscores that these goals cannot be fully realized through technical standards alone; economic mechanisms like the proposed GHG fund are essential to achieving long-term sustainability in maritime decarbonization.
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