Posted on October 17, 2025
A fight is brewing ahead of the upcoming meeting of the International Maritime Organization (IMO) over new rules to reduce greenhouse gas emissions in the shipping industry. Formal approval at the October 14-17 meeting was assumed until the United States announced its opposition to the regulations in August and called on other governments to reject the proposal or face retaliation.
The IMO is an unlikely place for this confrontation. As a United Nations specialized agency focusing on setting universal standards for maritime safety and security, the IMO is rarely controversial. In fact, the IMO is one of only a handful of UN organizations identified in the Trump administration’s fiscal year 2026 budget request as deserving of US funding. Specifically, it was highlighted for its standards setting, efforts to reduce pollution and prevent maritime disasters, and enhancing US security by helping “secure shipping lanes against terrorism and related threats.”
Nonetheless, the IMO finds itself in the crosshairs of the Trump administration.
The dispute centers on draft amendments to the existing International Convention for the Prevention of Pollution from Ships (MARPOL), which the United States ratified in 1980 to address pollution of the marine environment by ships. The new rules, if approved in October, would be added to Annex VI of MARPOL and would apply to all parties to the agreement and annex 16 months after adoption through a process called “tacit acceptance.” The United States is a party to both MARPOL and Annex VI of the convention.
These regulations seek to implement the IMO “Net-Zero Framework” through mandatory fuel standards for ships over 5,000 gross tonnage and financial penalties for those failing to comply. Military and domestic shipping vessels are exempted. Overall, however, covered ships account for about 85 percent of global emissions from the shipping industry.
Under the proposal, ships must reduce their annual greenhouse gas fuel intensity (the amount of greenhouse gas emitted for each unit of energy used). Specifically, ships with emissions over two specified thresholds, which increase annually from 2028 to 2035, would be required to pay fines ($100 per ton of excess emissions over the first threshold and $380 per ton of excess emissions over the second) into an “IMO Net-Zero Fund.” Revenues would be used to reward ships with low emissions, support research and technology transfer, and help mitigate the impact of the regulations on vulnerable states.
What impact will the new regulations have? The most recent IMO study found that shipping accounted for 2.89 percent of global anthropogenic emissions. The IMO projects that the regulations could reduce greenhouse gas emissions from shipping by 40 percent. Thus, if everything works as planned, the regulations will reduce global greenhouse gas emissions by about 1 percent.
But things may not go as planned.
The new regulations would take effect in 2027, giving ships a relatively short window to come into compliance. According to shipping firms, fines could amount to “about $20 billion to $30 billion a year by 2030,” with the cumulative total possibly exceeding “$300 billion by 2035 if the global fleet misses targets by as little as 10%.”
The financial penalties are intended to incentivize compliance. However, the costs of compliance are even steeper. Over 90 percent of the current global fleet uses conventional fuels and cannot utilize greener alternatives. Retrofitting existing ships is expensive, and some may choose to pay the fines instead.
In addition to retrofitting ships, infrastructure also needs to be overhauled, including investments related to new alternative green fuel production and refitting ports for storage and bunkering. According to one estimate, “To meet the International Maritime Organization (IMO) 2050 emission targets, the scale of investment is estimated to be up to $1.9tn.”
Finally, there is the fact that alternative green fuels cost far more—at least three to four times more—than traditional fuels. Consequently, fuel costs are projected to rise by 350 percent.
Overall, whether shippers comply or simply pay fines, the cost of shipping is likely to increase if the IMO regulations are implemented, and consumers will bear the brunt of the price.
