April 11, 2025, 11:45 a.m. ET - In a significant global agreement reached in London on Friday, countries acknowledged the urgent need to combat climate change through the shipping industry. The International Maritime Organization, a UN agency, has proposed a groundbreaking draft accord that mandates all cargo vessels to either reduce their greenhouse gas emissions or incur a financial penalty.
The shipping industry, responsible for roughly 3 percent of global greenhouse gas emissions—comparable to the aviation sector—has now been put under international scrutiny for its environmental impact. The new pact, expected to take effect in 2028 pending ratification by member states, represents the first time a global industry will face a standardized fee for their emissions on an international scale. The revenue generated from this initiative is earmarked primarily for aiding shipping firms in transitioning to cleaner fuel alternatives.
Despite earlier challenges, including the United States retracting from discussions just days prior, representatives from various countries managed to achieve this consensus without further bumps. “The U.S. is just one country, and it won't derail the entire process,” asserted Faig Abbasov, shipping director for Transport and Environment, who praised this significant step toward accountability in the maritime sector.
The agreement encompasses all vessels, regardless of nationality, including many registered under the U.S. flag, though the effects of this new fee on American-based ships remain ambiguous. Observers are awaiting Washington's response to the finalized agreement, which is anticipated as international stakeholders prepare to endorse this historic measure.
The shipping industry, responsible for roughly 3 percent of global greenhouse gas emissions—comparable to the aviation sector—has now been put under international scrutiny for its environmental impact. The new pact, expected to take effect in 2028 pending ratification by member states, represents the first time a global industry will face a standardized fee for their emissions on an international scale. The revenue generated from this initiative is earmarked primarily for aiding shipping firms in transitioning to cleaner fuel alternatives.
Despite earlier challenges, including the United States retracting from discussions just days prior, representatives from various countries managed to achieve this consensus without further bumps. “The U.S. is just one country, and it won't derail the entire process,” asserted Faig Abbasov, shipping director for Transport and Environment, who praised this significant step toward accountability in the maritime sector.
The agreement encompasses all vessels, regardless of nationality, including many registered under the U.S. flag, though the effects of this new fee on American-based ships remain ambiguous. Observers are awaiting Washington's response to the finalized agreement, which is anticipated as international stakeholders prepare to endorse this historic measure.
