Maritime Investment at a Standstill Due to Unclear IMO Carbon Levy, Says ABS Leader

Uncertainty surrounding the International Maritime Organization’s (IMO) proposed carbon levy is creating significant hesitation in shipping industry investments, according to Christopher Wiernicki the Chairman and CEO of the American Bureau of Shipping (ABS).

Wiernicki expressed his concerns during his appearance at the CERAWeek energy conference this week in Houston, Texas. “A carbon levy is a wild card. It will all depend on how it is implemented and enforced,” Wiernicki stated, pointing out that potential levy rates ranging from $18 to $150 per ton create significant market uncertainty.

The maritime industry isn’t standing still, however. Shipowners are actively implementing available solutions while awaiting clarity on carbon pricing. “The industry is balancing short-term efficiency measures with long-term fuel readiness,” Wiernicki explained, noting that investments in digital optimization, wind-assisted technologies, and energy efficiency are serving as bridge solutions. He also highlighted the growing potential of carbon capture and storage (CCS), with ongoing trials suggesting it could enable continued fossil fuel use in a net-zero scenario.

These developments come as part of the IMO’s broader strategy to achieve net-zero greenhouse gas emissions from international shipping by around 2050. The organization has set ambitious intermediate targets, including reducing total annual GHG emissions by at least 20% (striving for 30%) by 2030 and at least 70% (striving for 80%) by 2040, compared to 2008 levels.

The IMO’s 2023 GHG Strategy outlines a two-pronged approach, combining technical standards for marine fuel GHG intensity with economic measures through a maritime GHG emissions pricing mechanism.

A clear timeline for implementing these measures has been established. The Marine Environment Protection Committee (MEPC 83) will approve mid-term measures this April, followed by formal adoption in Autumn 2025. The measures are scheduled to take effect in 2027, approximately 16 months after adoption.

An Intersessional Working Group on Reduction of Greenhouse Gas Emissions from Ships is currently discussing crucial elements including global marine fuel intensity regulations, the economic mechanism’s structure, the organizational aspects of the proposed ‘IMO Net-Zero Fund’, revenue disbursement, and potential food security impacts?.

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