International shipping agrees to emit 65% less CO2 by 2040

The member states of the International Maritime Organization (IMO), the maritime branch of the United Nations, reached an agreement on Friday on greening shipping. The deal involves a standard to limit the use of fossil fuels and a price mechanism for companies that do not meet the imposed standards.

Ships will have to emit 30 percent less greenhouse gases by 2035; by 2040, that figure will rise to 65 percent. These are reduction targets compared to 2008. Companies that do not meet this standard must pay 380 dollars per ton of CO2 equivalent to bridge the gap.

‘Net Zero Fund’

This money will go to a ‘Net Zero Fund,’ which will be used to green the maritime sector and compensate for any negative consequences, such as higher food prices due to more expensive shipping.

Starting in 2028, any ship exceeding a specific CO2 limit will face a fine. The fine will initially be set at $100 per ton of CO2, with higher penalties for greater exceedances. These measures, set to be formally adopted in October 2025 before taking effect in 2027, will become mandatory for large ocean-going ships over 5,000 gross tons.

A second, more ambitious target is a 43 percent reduction in emissions by 2035. Various remedial options are also provided if this target is not met. Sixty-three countries, including Belgium, supported the plan Belgium. Sixteen countries, including Russia and Saudi Arabia, voted against it. The United States did not participate in the vote.

‘Historic deal’

The shipping sector, which, like aviation, is not covered by the Paris Climate Agreement, will become the first sector to set itself binding reduction targets under the agreement.

The European Commission called the agreement “a historic deal in the fight against climate change ” and “a meaningful step toward achieving net-zero greenhouse gas emissions from global shipping by 2050.”

The pricing of CO2 emissions is expected to generate revenues of approximately $11 to $13 billion per year. This money will be used to promote the development and deployment of zero-emission or near-zero-emission fuels.