Shipping’s Carbon Price Postponed: A Blow To Climate Governance

On October 17, the International Maritime Organization (IMO) voted to delay the adoption of its Net-Zero Framework by one year. This framework aims to decarbonize the shipping sector and introduce the first global carbon price for any major industry. International shipping moves 90% of global trade and produces nearly 3% of global CO₂ emissions, so the stakes are high. The delay signals fractured global climate governance, leaving shipping decarbonization in the hands of fragmented regional measures and prolonging fossil fuel dominance.

If adopted, the measures would have targeted ships over 5,000 gross tonnes (which are responsible for about 85% of shipping emissions) to cut their annual greenhouse gas fuel intensity (GFI). Vessels that exceeded the threshold would buy credits, while those that beat the target could sell surplus credits. The framework includes two compliance levels: a base target and a direct compliance target, at which ships would be eligible to earn ‘surplus units’. It also proposes a Net-Zero Fund to collect carbon pricing contributions and invest in innovation, training, technology and support for least developed countries. The IMO intended to enforce these measures in 2027 and start collecting contributions in 2028.

However, the vote collapsed under heavy geopolitical pressure. While Saudi Arabia led the motion to defer, Reuters reported in September that the US warned nations to reject the deal or face trade consequences, flipping several countries that had previously backed the framework.

What happens now? The IMO will revisit the decision in October 2026, but the chances of consensus look slimmer than ever. Technical talks on pricing levels and revenue allocation will continue, but the earliest possible start date for carbon pricing now moves to 2028.

As it stands, Saudi Arabia, the US and Russia emerge as winners, maintaining their dominance as fossil fuels continue to make up 40% of global seaborne trade. The delay gives LNG breathing room as a ‘transition fuel’, remaining cheaper and more widely available than green alternatives like ammonia or e-methanol. Existing infrastructure also makes it an easy choice for shipowners. On the losing side, the deferment means the EU loses momentum in global climate diplomacy and faces fragmented regulations as regional schemes like EU ETS and FuelEU Maritime fill the gap. Early movers, such as Maersk, face uncertainty that could stall zero-emission investments, while low-emission fuel projects risk pauses or cancellations as policy support and subsidies weaken.

The delay isn’t just about shipping; it was a stress test for global climate governance. A unified carbon price would have sent a clear market signal, unlocked billions for clean-fuel infrastructure and created a level regulatory playing field. The next 12 months will show whether global climate governance can evolve, or whether fragmented, regional action will continue to define shipping decarbonization.