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How the IMO’s Net-Zero Delay Impacts Global Shipping in 2025

  • Writer: Chandrama Vishawakarma
    Chandrama Vishawakarma
  • 3 days ago
  • 6 min read
Shipfinex logo, text: "How the IMO's Net-Zero Delay Impacts Global Shipping in 2025", image of ships in cloudy and clear skies, blue theme.

The International Maritime Organization (IMO) governs 80% of global trade through its environmental and safety standards. In March 2025, its Marine Environment Protection Committee (MEPC) voted to delay the adoption of a framework for achieving net-zero greenhouse gas emissions from shipping by 2050 (Ship & Bunker, 2025).


This postponement has sent ripples through the global maritime sector. It shifts power toward regional regulators like the European Union and exposes a growing divide between compliant and non-compliant fleets. For shipowners, financiers, and aspiring owners, understanding the implications of this delay is essential to navigating the decade ahead.


1. What the MEPC Delay Means


The MEPC’s decision effectively postpones finalizing a global carbon pricing mechanism and associated enforcement framework until at least its next session, MEPC 83, now anticipated in Spring 2026. (Ship & Bunker, 2025).


The vote was not about abandoning net-zero goals but about how to implement them. Developing nations requested more time to agree on equitable revenue-sharing mechanisms, while several large shipping nations expressed concerns over cost impacts on trade competitiveness. The result: an extended negotiation period that leaves industry players operating in a regulatory gap.


Without a unified global framework, regional and national systems are now setting the pace for maritime decarbonization, a development that fragments compliance and increases operational complexity.


2. The Rise of Regional Regulation


In the absence of IMO consensus, the European Union’s Emissions Trading System (EU ETS) has become the most influential carbon pricing scheme for shipping. As of 2025, the EU ETS covers 70% of emissions from voyages entering or leaving EU ports, expanding to full coverage by 2026 (European Commission, 2024). At carbon prices of €80–90 per ton, this translates into annual costs exceeding $2 million for a large container ship operating between Europe and Asia (DNV, 2024).


Other regions are following suit. Singapore has launched Green and Digital Shipping Corridors focused on LNG and methanol bunkering (Maritime and Port Authority of Singapore, 2024). Japan and South Korea are testing ammonia-fueled vessels under national subsidy programs. California continues to enforce strict at-berth emission controls through its Air Resources Board (CARB, 2024).


This emerging “patchwork” of regional policies rewards fleets already equipped for lower emissions while penalizing those lagging behind. The lack of coordination also risks double-counting emissions and overlapping compliance costs, increasing pressure on ship operators with global routes.


3. The Commercial Consequences


Environmental performance now directly affects commercial returns. Under the IMO’s Carbon Intensity Indicator (CII) system, ships receive annual A–E ratings based on emissions per cargo ton per nautical mile. Charterers and financiers increasingly treat these ratings as financial indicators.


According to the International Chamber of Shipping (2024), charter rate differentials between A-rated and D-rated ships have widened by up to 20%. Insurers now apply risk-based surcharges for low-rated vessels. Meanwhile, owners allocating capital to compliant technology such as energy-saving devices, dual-fuel engines, or voyage optimization systems are commanding higher utilization and asset retention values.


4. Financial and Operational Headwinds


The cost of staying compliant is rising. Retrofitting older ships with scrubbers, ballast water systems, and efficiency upgrades can exceed $5 million per vessel. For ships nearing the end of their lifecycle, such capital expenditures are often uneconomical, accelerating early scrapping (Lloyd’s Register, 2023).


Alternative fuels, while promising, remain expensive and logistically complex. LNG and methanol are available at scale in select ports, but hydrogen and ammonia infrastructure remains limited. The World Bank estimates that full decarbonization of shipping will require $1–1.4 trillion in new capital deployent by 2050 (World Bank, 2024).


The delay compounds uncertainty. Shipowners must now plan capital allocation without clarity on global carbon pricing or transitional credits. Financing terms are also shifting. Under the Poseidon Principles, lenders assess portfolio alignment with IMO targets. A prolonged delay means banks and lessors are applying their own interpretations, leading to uneven lending criteria and higher capital costs for non-compliant fleets.


5. The Technology Factor


Technology has become the bridge between compliance and profitability. Data-driven fuel monitoring, AI-based route optimization, and predictive maintenance systems are no longer optional. DNV (2023) reports that such systems can reduce fuel consumption by 10% and emissions by 15% while improving regulatory transparency through automated reporting.

Blockchain applications in documentation and compliance verification are also advancing. Singapore’s TradeTrust initiative allows digital verification of ship documents, and similar pilots are underway in the EU and Middle East (Maritime and Port Authority of Singapore, 2024).


As digital infrastructure expands, owners who utilize real-time performance monitoring are better positioned to gain operational flexibility and credibility with financiers. Those that rely solely on manual reporting risk falling behind both technologically and financially.


6. Winners and Losers


The MEPC delay creates clear market segmentation. Leading fleets those with modern vessels, high CII ratings, and access to ESG-linked financing are gaining premium charters and lower insurance rates. At-risk operators with older tonnage and high-emission profiles, face declining utilization, tightening credit, and rising costs.


This shift mirrors a broader transformation across global shipping. Environmental performance has become a core component of asset valuation, not a peripheral metric. The delay does not remove this trend; it intensifies it by letting regional policies dictate value faster than global consensus can catch up.


7. The Road Ahead


The IMO remains committed to achieving net-zero emissions from international shipping by or around 2050. The MEPC 83 session, expected in Spring 2026, will revisit the draft framework and propose mechanisms for revenue distribution and carbon levy implementation (IMO, 2024).


In the meantime, shipping companies must navigate a dual reality: regional compliance today and anticipated global harmonization tomorrow. A prudent strategy being adopted by many is to allocate capital as if the IMO framework were already active, adopting efficiency technologies, diversifying fuel portfolios, and ensuring transparent emissions data.


The delay may have slowed regulation, but not momentum. In the words of DNV’s Maritime Forecast 2024, “decarbonization timelines may shift, but direction does not change.” The winners will be those who prepare before enforcement, not after.


Conclusion


The IMO’s MEPC delay is not a step back from decarbonization. It is a reminder that the pathway to global alignment will be uneven and that agility, not size, will define competitiveness.


Ship owners and aspiring owners who read this delay as breathing room risk falling behind. Those who treat it as an opportunity to lead in efficiency, digitalization, and compliance readiness will shape the next chapter of maritime transformation.


In global shipping, delay does not mean pause. It means time to prepare.


Disclaimer:

This material is provided for informational purposes only and does not constitute financial, investment, or legal advice. All digital assets carry inherent risks, including potential loss of capital. Past performance is not indicative of future results. Please review the relevant offer and risk disclosures carefully before making any financial decision.


FAQS About IMO’s MEPC


What is the IMO’s MEPC? 

The Marine Environment Protection Committee (MEPC) is the International Maritime Organization’s decision-making body on marine pollution, emissions, and environmental policy.


Why did the IMO delay adoption of the net-zero framework? 

The delay reflects a lack of consensus among member states on how to implement a global carbon pricing system and distribute revenues fairly.


What are the short-term effects on shipowners? 

The delay increases uncertainty, strengthens regional systems like the EU ETS, and raises compliance costs for older fleets.


How does the EU ETS interact with IMO regulation? 

The EU ETS already prices maritime emissions and now covers 70% of international voyage emissions, making it the de-facto benchmark while the IMO framework is deferred.


What can owners and investors do now? 

Focus on improving CII ratings, fuel efficiency, and digital compliance to protect asset value ahead of the MEPC 83 vote later in 2025.


References (APA 7th Style)


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