IMO's net-zero framework: Industry at sea over carbon-levy decision

UN maritime body defers vote on key carbon levy till 2026, leaving global shipping industry uncertain on decarbonisation timelines and investment clarity

The latest decision by the United Nations (UN) maritime watchdog International Maritime Organisation (IMO) has left the international shipping industry in uncertainty.

 

This comes as global efforts towards maritime decarbonisation were coalescing in preparation for the proposed carbon levy — a vote on this has now been deferred till 2026.

 

“The IMO has agreed to adjourn the extraordinary session of the Marine Environment Protection Committee (MEPC), which was convened this week to consider the adoption of draft amendments to MARPOL Annex VI, including the IMO Net-Zero Framework,” the agency said late on Friday night. 

According to sources, India voted in favour of the motion to delay the extraordinary session that will decide the fate of the net-zero framework.

 

India had supported the motion in April when the IMO had adopted the framework principally. 

Sources said many member nations voted for the delay not because there was an opposition to the framework itself, but because the divide and recent developments had posed the concern that the whole framework might completely be off the table if it were put to vote on Friday.

 

“The extraordinary session will be reconvened in 12 months. In the interim, member states will continue to work towards consensus on the IMO Net Zero Framework,” the agency’s own statement said. 

The IMO Net-Zero Framework was approved in April 2025, as a new Chapter 5 of the Draft Revised Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL). It will continue to be deliberated on in the interim. 

Queries sent to the ministry of ports shipping and waterways and the directorate general of shipping remained unanswered till going to press. 

It comprises a set of international regulations aimed at reducing greenhouse gas (GHG) emissions from ships, in line with IMO's 2023 Strategy for Reduction of GHG emissions from ships.

 

It includes two key elements: a global fuel standard and global GHG emissions pricing mechanism. 

The International Chamber of Shipping (ICS), which represents more than 80 per cent of the global shipping fleet, expressed its disappointment with the proceedings. 

“We are disappointed that member states have not been able to agree on a way forward at this meeting. Industry needs clarity to be able to make the investments needed to decarbonise the maritime sector, in line with the goals set out in the IMO GHG strategy. As an industry, we will continue to work with the IMO, which is the best organisation to deliver the global regulations needed for a global industry,” Thomas A. Kazakos, ICS Secretary General said. 

Dry bulk cargo carriers association Intercargo also made a similar statement. Most agree that the situation has become more challenging now. 

“The adjournment is a disappointing setback for shipping, but not the end of this journey. The adjournment for a full year creates serious challenges for meeting the timelines in the net-zero framework agreed in April. It will make delivery of the sector’s decarbonisation targets even more challenging,” said Jesse Fahnestock, Global Maritime Forum's director of decarbonisation. 

Similarly, Indian officials said that the government had already made plans on absorbing the impact of the new framework. Government estimates suggested a $100 million extra shipping expenditure for India.

 

This would be around 5 per cent and well within industry operating margins, estimates by India’s shipping regulator DG Shipping said. 

A private sector shipping executive said that the new rules now being seen as brittle in the wake of latest developments is not a good precedent for the sector.

 

While India faces not too high impact from this, the overall uncertainty does not augur well for investments towards greening of the blue economy. 

Industry is also unsure of what the fate of the carbon levy on shipping framework will become next year. 

The government’s assessments suggest that of India’s fleet of 1,524 registered vessels, only 212 ships (13.9 per cent) qualify as foreign-going and above 5,000 gross tonnage (GT).

 

Of these, around 135 ships are regularly engaged in overseas trade, and would have been subject to the compliance. 

“However, maritime decarbonisation will continue to be a larger trend. India’s push here has always been to support the future by starting off our nascent shipping and shipbuilding push on green lines and become Asia’s central green shipping hub. This will continue. The government is working on national climate goals and maritime transport decarbonisation is a part of the push,” a government official said. 

Recently, three major ports (owned by the central government) were recognised as green hydrogen hubs under the National Green Hydrogen Mission. They are Deendayal Port Authority (Gujarat), V.O. Chidambaranar Port Authority (Tamil Nadu), and Paradip Port Authority (Odisha).