Member States at MEPC 83 held from 7-11 April 2025. Credit: IMO

The historic outcomes from the International Maritime Organization’s Marine Environment Protection Committee 83 (MEPC 83) have prompted both cautious optimism and concern over whether they go far enough to meet the IMO’s greenhouse gas (GHG) targets in its 2023 strategy. Guy Platten, Secretary General, International Chamber of Shipping (ICS) described the outcome as “not perfect in every respect” but, some national shipowner associations, expressed hope it will be formally adopted in October 2025 – requiring a two thirds majority vote by Member States. But, what are the next practical steps for shipping, key maritime stakeholders and the energy and finance sectors, needed to ensure shipping can fully decarbonise? 

As seen with past decarbonisation measures such as the Carbon Intensity Indicator (CII), concerns persist over the complexity and burden on shipowners already navigating various regulations and reporting demands. MEPC 83 outcomes are intended to achieve, compared to 2008,  a 30% GHG emissions reduction by international shipping by 2030 and 70% by 2040. However, legal experts at Hill Dickinson warn that achieving net-zero emissions by 2050 may be “likely out of reach” under the current framework. They highlight potential conflicts with  regional schemes such as the European Union Emissions Trading System (EU-ETS) and the upcoming United Kingdom Emissions Trading Scheme (UK ETS).  There are also concerns over higher costs or new requirements for ships transiting green shipping corridors and new Emission Control Areas, which could influence logistics decisions.

Time to act

Owners are urged to act now. Stamatis Fradelos, ABS, Vice President, Regulatory Affairs, told ICS Leadership Insights that the next two years will be “critical” for gaining a competitive advantage. “Maritime leaders should act by evaluating fleet readiness, engaging with technology partners, and preparing compliance strategies” he explained. Fradelos also emphasised scenario modeling, internal training, and stakeholder collaboration with classification societies, flag states, and financiers to ensure investments align with regulation trajectories.

To meet the IMO’s binding emission targets, investments will be required in new vessels, and alternative fuels. Kelli Bodal-Hansen, banking and finance knowledge lawyer at Norton Rose Fullbright, told ICS Leadership Insights, that if, as expected, the global carbon pricing  scheme drives demand for dual fuel or lower emitting vessels, green finance could be “an important part” of this transition. Sustainability linked loans are one possible route, though Bodal-Hansen cautions “it could become harder to set ambitious targets around reducing emissions above the MEPC requirements”. Given the shipping sectors’ hard-to-abate nature, “transition finance could play a pivotal role” in unlocking capital for lower emission fleets.

The IMO Net-Zero Framework sets out  a global carbon pricing mechanism that could result in additional costs by 2035 of up to $500 per tonne of conventional bunker fuel emitted above the base target. To reduce confusion, the Global Centre for Maritime Decarbonisation has developed a cost and compliance calculator for owners and operators to estimate penalties and incentives tied to fuel decisions.

Stronger signals required

The carbon pricing scheme is intended to accelerate the shift to low and near-zero carbon fuels, providing rewards to ships that use zero/near-zero (ZNZ) fuels, support R&D and ensure a just transition. However, some stakeholders argue, despite it creating a strong foundation, ambitions should be higher. “The current pricing signals are too weak to drive the kind of investment needed in zero and near-zero fuels,” Albon Ishoda, Republic of Marshall Islands Special Envoy for Maritime Decarbonization, told ICS Leadership Insights. 

For the decarbonisation agenda to succeed, regulatory clarity must provide strong signals required to accelerate port infrastructure projects and low and zero-emission fuel supply.  

While acknowledging the importance of the Framework, Professor Lynn Loo, CEO, Global Centre for Maritime Decarbonisation, stressed that even with financial mechanisms, establishing new fuel supply chains, upgrading port and terminal facilities, and deploying vessels capable of using zero or near-zero fuels “are deeply interdependent efforts that require long lead times”. Urgent action is required, she told ICS Leadership Insights, especially amid uncertainties in raw material availability and global trade tensions. 

Jesper Nielsen, Group Responsibility, at major bunkering firm Monjasa, noted that the agreement is “an improved framework to build on” but told ICS Leadership Insights it does not yet support the scaling of complex fuel projects like green ammonia and e-methanol. These projects, he noted, are heavily influenced by decisions in other industries and governments – many of which have recently stalled across Europe. 

Nielsen said Monjasa is waiting to see if demand for alternative fuels will rise after MEPC 84. He noted that the market value of IMO over-compliance credits could be a decisive factor in making various biofuel options economically attractive over the next three to eight years. Of course, issues around biofuel supplies, particularly in light of competing needs for feedstock for biofuel and its impact on food security put any reliance on biofuels into question. 

Mikal Bøe, CEO at nuclear marine power firm Core Power, was more critical, stating that the MEPC 83 will not catalyse alternative, near zero and zero fuel producers. “The economic realities that are dictated by the laws of nature cannot be ignored or discounted,” Bøe said. 

As the formal adoption vote in October nears, stakeholders expect increased behind-the-scenes negotiations. Ishoda emphasised the importance of just and equitable implementation, ensuring revenues benefit not only early adopters but also nations—especially Small Island Developing States (SIDS) and Least Developed Countries (LDCs)—facing the steepest barriers. He warned that limited funds could be stretched too thin, stating: “The work cannot be left to technical experts or industry alone. It requires a political reckoning,” where those with “the most to lose” are not the only ones expected to compromise. “Now the real work begins,” he concluded.