The International Maritime Organization (IMO) has taken a historic step by approving the shipping industry's first global carbon pricing mechanism. Adopted during the 83rd session of the Marine Environment Protection Committee (MEPC 83) in April 2025, the Net-Zero Framework introduces mandatory greenhouse gas (GHG) emissions limits and a pricing mechanism, aiming to steer international shipping towards net-zero emissions by around 2050.
While the decision marks meaningful progress in maritime climate governance, the level of ambition remains insufficient. The framework, as it stands, is unlikely to deliver the reductions needed to align the sector with the 1.5°C climate goal, and sustained international pressure will be critical to close the ambition gap.
What is the Net-Zero Framework?
Starting in 2028, the Net-Zero Framework will apply to ships over 5,000 gross tonnage (GT), which account for roughly 90% of international shipping emissions. These vessels will be required to meet specific GHG Fuel Intensity (GFI) targets, which measure GHG emissions per unit of energy.
The framework introduces a two-tier compliance structure:
Tier 1 (Base Target): Requires an 8% reduction in GFI by 2030, 30% by 2035, and 65% by 2040.
Tier 2 (Direct Compliance Target): Sets a stricter path, requiring a 21% reduction in GFI by 2030 and 43% by 2035.
These targets form the basis for the new GHG pricing mechanism, which imposes financial penalties on ships that fail to meet emissions intensity standards.
Source: IMO
How the Carbon Pricing Mechanism Works
Utilizing these two tiers, it functions by imposing differentiated costs on ships based on how far they exceed, or outperform, the target annual GFI. Ships that exceed the base compliance target must purchase Remedial Units (RUs) at a high rate of $380 per tonne of CO₂-equivalent emissions, serving as a strong disincentive for continued high-emission operations. Ships that emit above the direct compliance target but below the base tier are subject to purchase RUs at a rate of $100 per tonne of CO₂-equivalent emissions.
Conversely, ships that emit less than the direct compliance target generate Surplus Units (SUs). These can be traded or sold through the IMO Registry, creating a market-based incentive for operators to adopt low- or zero-emission fuels and technologies early.
Projected Impact and Key Criticisms
Despite being the first global carbon pricing scheme for shipping, the Net-Zero Framework is already under scrutiny for its insufficient ambition and delayed implementation.
Limited Emissions Reduction: The framework is expected to reduce GHG emissions by only about 8% in GFI by 2030, which will most likely result in falling short of the IMO’s 2023 indicative target of 20–30% reductions compared to 2008 levels.
Implementation Delay: Although formal adoption is scheduled for October 2025, most measures will not take effect until 2027, with full implementation expected by 2028. This timeline raises concerns about lost time and momentum in the crucial years leading up to 2030.
Equity and Justice Gaps: The framework lacks meaningful consideration for developing and climate-vulnerable nations, including Pacific Island states. These countries have called for more substantial financial support and aggressive emission reductions, noting that rising shipping costs could threaten food and energy security in small island developing states (SIDS).
Implications for South Korea and the Global Maritime Industry
As a leading shipbuilding nation and a major player in global shipping, South Korea is uniquely positioned to influence the direction and success of the Net-Zero Framework. The South Korean government has already pledged a 60% reduction in maritime emissions by 2030 compared to 2008 levels, surpassing the IMO's targets.
If Korea follows through with more proactive reductions than those outlined in the IMO framework, it could solidify its position as a global climate leader driving the net-zero transition by 2050. In 2025, South Korea will host the 10th Our Ocean Conference (OOC) in Busan and chair the APEC Oceans Ministers’ Meeting, providing a timely opportunity to reinforce its leadership in maritime decarbonization on the diplomatic stage. For instance, the government should expand its support for the Green Shipping Corridors Special Act, facilitating the deployment of zero or near-zero emission vessels along key trade routes.
Next Step of Diplomatic Breakthrough
The adoption of the Net-Zero Framework marks a historic breakthrough in global climate diplomacy. In a time when international cooperation on climate remains fragile, the fact that governments could agree on a framework that introduces carbon pricing to the global shipping sector is remarkable. This is the first time a hard-to-abate industry of such scale has seen a commitment to a sector-wide transition.
However, without further refinement of its policy architecture and strong implementation support, the framework risks failing to deliver the scale of emissions reductions needed to align with global climate goals this decade.
To ensure its effectiveness, several key actions must be followed.
First, the global shipping industry must accelerate the transition to scalable zero-emission fuels. Compliance targets could remain largely aspirational unless supported by clear demand signals, fuel availability, and technological readiness.
Second, the carbon market must be designed to function meaningfully. In particular, SUs earned by ships that overachieve on emissions reductions must carry a high enough value to attract first movers and catalyze private-sector investment in low-carbon solutions.
Lastly, national governments, including South Korea, should take policy and financial measures to bridge the cost gap between fossil and zero-carbon fuels. These efforts are especially critical before the framework’s first parameter review in 2031, which could become a turning point for scaling up ambition.
The upcoming special MEPC session in October will be a critical moment to define the detailed guidelines, revenue distribution, and market safeguards that will determine the framework’s effectiveness in practice. The course toward net-zero shipping has been set, and what lies ahead is an opportunity to build on this momentum and shape an equitable, ambitious, and transformative path forward for one of the world’s most essential industries.
