Alison Shaw is with the Clean Shipping Coalition; Natacha Stamatiou is head of IMO engagement on reducing emissions for the Environmental Defense Fund; Jamie Yates is climate and renewable energy manager for Pacific Environment; and Mark Lutes is senior advisor for global climate policy at WWF.
This year marks an important milestone for global climate diplomacy, with the United Nations finally taking action on one of the world’s biggest polluters: international shipping.
In April 2025, governments reached a historic agreement at the UN’s shipping arm – the International Maritime Organization (IMO) – on the Net-Zero Framework.
The policy will be the world’s first and binding global emission pricing on any sector. For organisations like ours that have been following the IMO debates for several years, this result was proof that climate multilateralism is still alive and can deliver meaningful action.
What makes the Net-Zero Framework unique is that it includes an emission pricing element requiring shipping companies to pay a penalty fee for failing to comply with carbon intensity targets for the energy they use on ships. These penalties are projected to generate $10–15 billion annually from 2028 in climate finance.
Yet, while the policy’s adoption in October will mark a breakthrough, critical details that still remain to be decided will make or break this flagship climate law before it enters into force in 2027.
The most contentious issue yet to be finalised is which types of energy will be incentivised on ships as alternatives to fossil fuels – in other words, which alternative fuels will be recognised as delivering genuine, deep emissions reductions.
Gas and biofuel risk
The Framework is currently “fuel neutral,” meaning that all fuel types could qualify, regardless of their actual climate performance. This opens the door to cheap but harmful solutions, like high-risk biofuels and fossil gas, known as Liquefied Natural Gas (LNG).
High-risk biofuels, like much of those derived from soy and palm oil, are especially concerning. Their production all too often is linked to deforestation, violation of land rights, especially for Indigenous peoples and customary landowners, water stress, and food insecurity, and in some cases, even higher emissions than fossil fuels.
The scale of the problem is quite staggering and the consequences could be disastrous for global food security and soil health worldwide. A study has estimated that satisfying shipping’s biofuel demand could require up to 35 million hectares of land by 2030 – an area roughly the size of Germany – and consume the equivalent of 300 million bottles of vegetable oil per day.
The impacts of high-risk biofuels have already been felt in communities and lands in Latin America, where expansion of soy production is the second-largest driver of deforestation. In South-East Asia, 45% of palm oil plantations have occupied previously forested land and have expanded by 370% between 1990 and 2023. Communities in these regions bear the brunt, often losing their land and livelihoods in the process.
Quantitative accounting
A safeguard against these harms is to quantitatively account for indirect land-use change (ILUC) emissions. ILUCs occur when agricultural land is diverted to biofuel production pushing food or feed production into new areas and driving the destruction of carbon-rich ecosystems.
If ILUC emissions are ignored, cheap biofuels will inevitably flood the market making them the go-to solution for meeting the shipping climate targets, jeopardizing shipping’s climate targets.
Worse, large-scale investment in high-risk biofuels could slow the development and uptake of truly sustainable alternatives, such as green e-fuels, given the limited supply of renewable resources and investment capital.
To unlock this finance, governments should provide clear incentives for zero-emission solutions such as maximising energy efficiency and wind propulsion, batteries and solar energy, and renewable e-fuels. Only these genuinely clean alternatives will help achieve short- and medium-term climate goals while keeping transition costs down and ensuring renewable energy isn’t wasted.
Make fuel from renewables
In the long run, shipping’s decarbonisation hinges on the large-scale production and adoption of e-fuels made from renewable electricity. Growing demand for such fuels would help secure investments in future and existing projects especially in countries with strong potential for green hydrogen production, many of them located in Africa and South America.
Equally important is ensuring that the revenues generated by the Framework – billions of dollars annually – are distributed fairly. The funds must not only assist the maritime sectors of the most climate-vulnerable nations but also drive the development of resilient renewable energy infrastructure that advances the transition of the shipping sector.
This October and in the months ahead, we – the Clean Shipping Coalition, Environmental Defense Fund, Pacific Environment, and WWF – will follow the IMO’s negotiations. Our role will be to provide governments with rigorous, science-based analysis to ensure decisions are taken in the interest of the climate, biodiversity, and communities worldwide. With the right choices, the IMO can set shipping on course for a cleaner, healthier future.
