Net Zero for the International Shipping Sector? An Analysis of the Implementation and Regulatory Challenges of the IMO Strategy on Reduction of GHG Emissions

Abstract

In 2018, the International Maritime Organization (IMO) announced the first sector-wide emission reduction target for international shipping. The roadmap to achieve this goal is the Initial IMO Strategy on Reduction of GHG Emissions from Ships, which proposes implementation measures for the short, medium and long term. This article examines three of these measures: National Action Plans (NAPs), market-based mechanisms (MBMs) and alternative fuels. We argue that NAPs can play a key role in directing national action and facilitating implementation within national jurisdictions. In relation to MBMs, we find that a carbon tax might be more efficient than emission trading. Yet, ultimately, the sector's decarbonisation can only be truly achieved with zero-carbon fuels. Noting the considerable barriers to the development and use of these fuels, we consider how the private sector is beginning to shift resources to this challenge, spurred by the IMO targets and new understandings of climate-related financial risks and opportunities.