đź•’ Last updated on August 10, 2025
The world’s shipping industry is responsible for about 2% of total greenhouse gas emissions. These gases trap heat in the atmosphere and contribute to global warming.
A Global Push to Cut Shipping Emissions
To address this, a new set of rules has been proposed under the International Maritime Organisation’s Net-zero Framework. The goal is to cut emissions from all large ships, make the industry cleaner, and promote the use of fuels that do not harm the environment.
Under the framework, shipowners would have to meet strict emission targets. Those who fail would pay financial penalties. The collected funds would go into a Net Zero Fund to reward clean fuel use, support workers during the green transition, and help poorer countries adapt if greener shipping impacts their economies, such as through increased food import costs.
Many countries see this as an important step in fighting climate change. At a key meeting earlier this year, most governments voted in favor of adopting these targets. Sixty-three countries supported the plan, while only 16 opposed it.
The Resistance from Oil-Exporting States
A group of eight oil- and gas-exporting nations has strongly opposed the adoption of the Net-zero Framework. These nations include Saudi Arabia, the United Arab Emirates, Iran, Bahrain, Iraq, Kuwait, Yemen, and Venezuela.
They argue that the emission targets are too steep and unrealistic for many shipowners to meet. In their view, the framework would place heavy financial burdens on the shipping industry, which would ultimately be passed on to consumers. They warn that shipowners would be forced to pay large sums to comply — money they estimate could reach between $59 billion and $161 billion a year by 2040.
Another key point of their opposition is the impact on what they call “transitional fuels.” These are fuels like biofuels and liquified natural gas (LNG) that are considered cleaner than traditional oil-based fuels but not fully emission-free. The oil-producing nations claim the new rules would discourage the use of these fuels, making it harder for the industry to shift gradually towards zero-emission options.
The group also raised concerns about fairness. They say ports with the infrastructure to supply zero or near-zero emission fuels, like hydrogen-based methanol or ammonia, would have a major advantage. Ships traveling between these ports could meet targets more easily, while others would struggle and have to pay more to comply.
The Debate Over Fuel Choices and Costs
Supporters of the Net-zero Framework believe discouraging transitional fuels is a good thing. While biofuels and LNG may produce fewer emissions when burned, their overall climate impact can still be significant. For example, biofuels are often made from crops like corn, sugarcane, or palm oil, which can lead to deforestation and land use changes. LNG emits less carbon dioxide than oil when burned, but methane gas — which leaks during production and transport — is a far more powerful greenhouse gas.
The framework’s backers point out that the true climate benefit of these fuels depends on how they are produced, transported, and used. They argue that moving directly to zero-emission fuels will have a bigger impact in reducing global warming.
The oil-producing nations, however, maintain that transitional fuels are a necessary step toward cleaner shipping. They say that without these fuels, many shipowners will face huge costs in replacing or upgrading vessels to run on advanced green fuels, which are still limited in supply and expensive.
The financial impact is at the center of the dispute. While oil states estimate annual compliance costs could exceed $160 billion in the future, other studies suggest the figure could be much lower. Some research estimates that shipowners may only pay around $11 billion annually by 2030 — a small fraction of what oil states claim.
Despite the cost concerns, the framework includes mechanisms to use the collected funds to help developing countries and build new infrastructure for cleaner shipping. Ports that invest early in facilities to handle green fuels will be better positioned to serve compliant ships, making them “winners” in this transition.
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For nations without such infrastructure, the financial penalties collected under the framework could be used to level the playing field. This could include building facilities to store and supply hydrogen-based fuels, upgrading port equipment, and training workers for new fuel handling processes.