[Stay on top of transportation news: .]
Shippers Warn IMO Net-Zero Plan Could Cost $300B by 2035
Despite US Opposition, a Majority of Countries Backed the Proposal Earlier This Year
A group of shipping firms warned that the International Maritime Organization鈥檚 planned net-zero rules risk imposing significant costs on the industry.
The IMO, shipping鈥檚 global regulator, has set a goal of net zero for shipping by midcentury and next month aims to formally adopt a plan that would see ships pay levies for at least some of their emissions. The U.S. has criticized the IMO鈥檚 Net Zero Framework, labeling it a 鈥済lobal carbon tax.鈥
The sector faces paying about $20 billion to $30 billion a year by 2030, shippers representing more than 1,200 vessels said in a statement dated Sept. 18. The amount could accumulate to more than $300 billion by 2035 if the global fleet misses targets by as little as 10%, they said.
Despite opposition from the U.S., a majority of countries backed the proposal in an IMO vote earlier this year. The International Chamber of Shipping, which represents more than 80% of the planet鈥檚 merchant fleet, also supports the plan.
The IMO鈥檚 NZF won鈥檛 be effective in helping shipping decarbonize in line with the IMO鈥檚 strategy announced in 2023 or ensuring a level playing field, the group of shippers said in the statement. Critical amendments 鈥渁re needed, including the consideration of realistic trajectories.鈥
鈥淚t is essential that the IMO NZF implements GHG measures that are fit for purpose,鈥 the group of companies, which includes Stolt Tankers, Frontline Plc and Saudi Arabia鈥檚 Bahri, said. It said measures should avoid 鈥渆xcessive financial burdens and inflationary pressure to the end-consumer.鈥
Written by Alaric Nightingale and Jack Wittels
