Starting January 1st 2026, the EU Emissions Trading System mandates 100% coverage of maritime emissions such as methane and nitrous oxide, leading to steep surcharge increases among ocean carriers. Compliance costs for VLSFO fuel have skyrocketed to an astonishing $319 per tonne with Maersk opting for green ethanol fuels to decrease its reliance on China for emissions mitigation.
Late 2025, following strong US opposition and threats of sanctions, the International Maritime Organization (IMO) delayed voting on its Net-Zero Framework (NZF) for shipping emissions until October 2026 - this postponement jeopardizing global decarbonization efforts while EU sustainability reporting simplifications and new CII guidelines advanced rapidly; industry leaders requested clarity.
The European Commission's 2025 Carbon Market Report highlights the successful launch of EU ETS for maritime transport, with over 99% compliance among shipping companies surrendering allowances for 2024 emissions. Meanwhile, IMO's Marine Environment Protection Committee postponed adoption of its Net-Zero Framework until October 2026 due to US opposition - these developments illustrate ongoing global efforts to curb maritime emissions.
International Maritime Organization's MEPC adjourned extraordinary session without adopting Net-Zero Framework (NZF) for shipping GHG reduction, action postponed to October 2026 due to U.S. opposition and trade penalties threats; leaving industry players facing regulatory uncertainty from regional measures like EU ETS remaining.
In its 2025 Carbon Market Report, the European Commission states that maritime transport has been successfully integrated into the EU ETS, having achieved more than 99% compliance for emissions associated with 2024. This, in turn, came despite a fall in power sector emissions. Meanwhile, in a setback, it has delayed the adoption of its Net Zero Framework for the shipping industry till 2026, with no consensus reached during MEPC sessions. In the meantime, industry has moved forward with investments in dual fuel methanol vessels and battery propulsion to decarbonise the industry.
In the past week, maritime emissions were thrust deeper into the spotlight, with regulators and the industry looking to tighten the screws. Shipping traders and industry personnel took a deep-dive into the European Commission's ETS coverage of shipping, while DNV did the same with ammonia's potential as a marine fuel. New research into sulfur-cutting rules sounded the alarm on the ongoing compliance and decarbonisation pressures facing shipowners.
Europe's shipping emissions in 2024 climbed 13% year-on-year to a new record high since mandatory reporting began in 2018, driven primarily by container ships taking longer routes via the Red Sea and moving cargo more frequently through disruption zones. At the IMOs 2024 Spring meeting in London, the US government successfully convinced those present to delay a vote on their landmark Net-Zero Framework Framework until October 2026, raising the risk of a derailment in the maritime decarbonization efforts.