IMO – Need for Strong Leadership to Decarbonise Global Shipping
Key Facts
- Maersk actively advocates for the adoption of ambitious, proportional, and enforce-able mid-term measures aligned with the Paris Agreement, including a greenhouse gas (GHG) price and a global fuel standard or a combination thereof.
- To ensure an effective transition, Maersk calls for a policy framework that is fuel-agnostic and structured to incentivize the development of scalable, zero-emission fuels.
Maersk’s GHG emission targets are validated by the Science Based Targets initiative (SBTi) to be in line with net-zero 2040 and the Paris Agreement’s 1.5-degree pathway towards 2030. As such, Maersk’s lobbying efforts on climate policy are centered on achieving these targets and ensuring the global decarbonisation of shipping. A robust regulatory framework from the International Maritime Organization (IMO) is essential to enable this transition.
Regional regulation, such as the EU’s Green Deal, only represents one step forward in a global context (i.e., 15-20% of emissions). Therefore, Maersk urges the IMO to take deci-sive action in 2025, where critical mid-term measures are expected to be finalized at the Marine Environmental Protection Committee (MEPC) meetings in April and October. For Maersk, the solution for upcoming measures must be sufficiently ambitious if we are to de-liver on the 2023 IMO Strategy on Reduction of GHG Emissions from Ships. At the same time, all IMO measures should be future-proofed, meaning they should be based on a full Life Cycle Assessment (LCA) and include all relevant greenhouse gases (GHGs).
IMO Mid-Term Measures
GHG Pricing Mechanism
A fundamental element to reaching decarbonisation is closing the competitiveness gap between fossil and alternative fuels. The IMO should deliver a Mid-Term Measure (MTM), in the form of a fuel standard and GHG pricing mechanism, at the MEPC meeting in April, 2025. This MTM must be set at a sufficient price level to cover the cost gap between fossil and renewable fuels.
All fuel assessments must be based on a full LCA to avoid shifting emissions to other sec-tors. A significant portion of the revenue generated from carbon pricing should be directed toward climate mitigation efforts and green fuel projects in developing countries. Moreover, funds should be dedicated to close the price gap between fossil and zero/near zero fuels as suggested by the World Shipping Council in its Green Balance Mechanism.
Global Fuel Standard
A Global Fuel Standard should set a limit on the GHG emissions intensity of fuels used by ships, expressed in grams CO₂eq/MJ. This measure should be based on fleet-wide compli-ance rather than individual vessels to incentivize high performance and investment in new, green technologies and fuels.
Maersk has concerns over the design of the current global fuel standard proposals at the IMO, which gives fossil LNG an outsize financial benefit, making pay-to-pollute the indus-try’s default option for compliance.
This design flaw risks locking in fossil LNG as the single fuel pathway, delaying the adop-tion of green alternatives. While LNG has a lower emissions intensity than conventional fuel oil, the proposals' calculation method rewards it disproportionately to its emissions. Correcting this issue can be achieved by ensuring accuracy in the emission values.
It should be stressed that Maersk supports that the fuel standard should be supplemented by a GHG fund and carbon pricing mechanism to collect the necessary funding.
Key Elements for an Effective Regulation
To close the price gap between green and fossil fuels on a well-to-wake basis and ensure the uptake of green fuels, Maersk believes three critical elements must be incorporated into the IMO mid-term measures:
- Accuracy in Emission Values: Emission values must accurately reflect real-world well-to-wake emissions. The regulation should apply penalties or rewards in propor-tion to the emissions of each fuel, ensuring that the carbon intensity of fuels is ac-curately accounted for in the pricing system.
- Sufficiently Strong Emission Reduction Trajectory: To encourage the adoption of green fuels with the necessary pace to meet IMO 2023 GHG targets, the regulation must ensure sufficiently high reduction targets on its way to net zero in 2050.
- Strong Economic Measures: The combined levy and/or remedial unit price must at least equal the marginal abatement cost of green fuels and technologies, ensuring that compliance with the regulations is more cost-effective than paying for non-compliance
Life Cycle Assessment
Maersk is also closely following the ongoing IMO discussions on Guidelines for Lifecycle Assessment. These discussions are highly technical, as developing LCA guidelines is a scientific task. However, Maersk urges IMO Member States to prioritize this work to ensure that IMO includes full LCA and Well-to-Wake emissions in its regulation. Since the IMO has traditionally considered only the Tank-to-Wake part of the emissions chain, it is crucial to revise the current approach. Solid and accurate LCA guidelines are paramount to securing actual decarbonisation and preventing emissions from merely shifting to other sectors. Additionally, all greenhouse gases, not just CO₂, must be considered to avoid stranded as-sets and ensure real climate impact.
A ‘Design Standard’ to End Fossil-Fuel-Only Ship Construction
While green fuels should be incentivized, there is also a need to limit the construction of fossil-fueled vessels. Maersk recommends that, from the mid-2030s, the IMO should intro-duce a design standard that requires all new ships to be capable of operating on alternative fuels. This proposal could be developed as part of future IMO EEDI regulations.
Transparency and Data Collection at the IMO
Robust data collection is crucial to securing real GHG reductions from IMO regulations. The current IMO Data Collection System (DCS) needs significant improvements, particularly the inclusion of actual cargo data. The current Carbon Intensity Indicator (CII) does not ac-count for cargo carried, which reduces the accuracy of the measure. The EU MRV system already includes cargo data, proving it is possible to collect this information.
The IMO should introduce mandatory transparency on ships’ GHG performance to meet increasing demands from customers and society.
Charting the course to a climate neutral continent
At the EU level, Maersk has called for the full implementation of the “Fit for 55” legislative package, which includes the EU Emissions Trading System (ETS) and the FuelEU Maritime Regulation. Maersk has pushed for the inclusion of shipping and in the future container terminals in the ETS and advocated for an end-date for fossil fuel-only newbuild vessels. These measures should bridge the cost gap between green and fossil fuels and accelerate the energy transition across the shipping sector. On land side transportation, Maersk is working for robust EU legislation to promote electrification of road transportation.
The regulatory landscape and its impact on our customers’ transport choices has profound importance for our ability to shift to green fuels. 2024 saw the inclusion of shipping to the EU ETS, a market-based mechanism designed to reduce GHG emissions in the EU. Another strong driver will be the new FuelEU Maritime legislation, which comes into force in 2025 and introduces increasingly stricter limits on GHG intensity for ships calling on European ports.
At the same time, FuelEU Maritime is complicated, with numerous definitions, compliance requirements, and mechanisms that introduce considerable complexity. Implementing a regional standard for fuels purchased and consumed in international trade creates challenges and inconsistencies. Maersk therefore advocates for a global legislation through the IMO to create a level playing field for all states.
Responsible ship recycling as important as ever in view of decarbonisation efforts by industry
As a responsible shipowner, Maersk’s ambition is to ensure safe and responsible recycling of our vessels at their end-of-life, benefiting workers, the environment, responsible yards, and shipowners. Globally, there is an urgent need for safe, financially viable and responsible recycling practices to meet the growing demand for large vessel recycling – especially for larger post-Panamax vessels. By leveraging these retiring assets, the shipping industry can also contribute to decarbonising the global steel value chain. As an industry leader and a significant owner of steel assets, we recognise our responsibility to drive positive impact.
Maersk has developed its own Responsible Ship Recycling Standard (RSRS), setting heightened standards on Health & Safety, Environment, Anti-corruption, Subcontractors and Labour and Human Rights. Maersk has worked closely with different yards across the world and, notably in Alang, India, on implementing the RSRS when recycling a Maersk vessel.
Maersk actively collaborates with stakeholders to foster a supportive regulatory environment, addressing the critical capacity challenges required to meet growing demands for responsible ship recycling. Advocating for effective policies to accelerate responsible ship recycling remains a key priority for Maersk.
We also work to create global opportunities for responsible post-Panamax ship recycling, where recycling capacity shortfalls can only be addressed through global consensus on the approval of more yards with appropriate safety and environmental standards.
Finally, Maersk welcomes the entry into force of the IMO’s Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships. However, since its adoption over a decade ago, the ship recycling industry has undergone a substantial modernisation and Maersk consequently calls on the IMO to immediately start a revision and update of the Hong Kong Convention.
