In April, the International Maritime Organization’s (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 was a landmark step towards decarbonising international shipping and one that the International Chamber of Shipping (ICS) has been advocating for and fully supports.

While being fully supportive, Shipowners still have real concerns about how complicated the new rules could become, especially smaller to medium sized companies, who may struggle with compliance costs. So far, the focus has been on the penalties for emissions (‘the sticks’), but clear incentives (‘the carrots’) for cleaner fuels will be just as important. It is these incentives that will motivate fuel producers to deliver the new fuels and infrastructure that will enable shipping to meet the targets.

Governments must also quickly set clear standards for these cleaner fuels. This will reassure fuel producers that investing in green fuel infrastructure makes sense.

In October, the IMO is expected to adopt these measures and give details about how these incentives will work. Shipowners and energy producers need certainty on this so they can confidently make investments in cleaner technologies.

Thomas A. Kazakos, ICS Secretary General commented:

“The IMO needs to formally adopt the Net Zero Framework in October to send a clear signal to industry and provide the incentive needed to produce these cleaner fuels. Industry needs clarity, simplicity, and detail on the rewards.

We also call on those with unilateral and regional schemes, such as EU ETS, to agree to having one clear and transparent system under the IMO. This is critical if we are to meet the time frames set out.”

ICS has put forward submissions to the IMO to help clarify these issues, including a request to replace the word ‘may’ with ‘shall’ to ensure a clearer signal is sent to the market.

Additionally ICS has responded to the EU Commissions consultation encouraging them to replace the EU ETS with the IMO NZF as soon as it is adopted. Clear and simple rules are essential for shipping to successfully and quickly transition to net zero.