Safety
Carbon pricing for shipping remains unresolved ahead of a consequential run of talks in late November.
The working group met from 1 to 4 September 2026, ahead of the Marine Environment Protection Committee's eighty-fifth session (MEPC 85).
Under the framework agreed at MEPC 83, ships face progressively tighter GHG fuel-intensity requirements alongside a pricing mechanism rewarding vessels using zero and near-zero emission fuels.
Formal adoption was due last October but was deferred for a year after contentious negotiations and opposition led by the United States.
Four competing proposals dominated the London round. Liberia's proposal would tie fuel-intensity requirements to the availability and affordability of commercially viable fuels, replacing the fund-based mechanism with tradeable Surplus Units.
Brazil would preserve the existing framework but soften its start, with fuel-intensity reductions of three per cent in 2029 and four per cent in 2030.
It retains a two-tier compliance system priced at 100 and 380 US dollars per tonne of CO2 equivalent.
Tuvalu proposed a stricter trajectory, with tier pricing of 300 and 380 US dollars per tonne and a thirty per cent direct compliance reduction target by 2035.
Australia, Canada, South Africa and the UK broadly back retaining the existing framework, including the IMO Net-Zero Fund. China is pushing for technology-neutral language covering shore power and wind propulsion.
The United States, Saudi Arabia and other oil-producing states maintained their opposition throughout, continuing to push to scrap or substantially weaken the pricing mechanism.
Norway and Pacific Island states argued that weakening the mechanism would blunt incentives to invest in alternative fuels.
The proposed Net-Zero Fund is expected to generate in the region of 10 billion to 15 billion US dollars annually. Whether it ultimately takes the form of a fund or a lighter facility remains undecided.
Its governance and revenue distribution remain among the most contested elements of the talks.
The IMO's own summary described "genuine willingness" to make progress, and observers noted fewer procedural disputes than in earlier rounds.
But the four days ended with the lifecycle GHG assessment framework deferred entirely to the next session, alongside unresolved questions on pooling and credit transfer.
At least two-thirds of states are understood to support some form of centralised pricing and collection system, but this has not translated into a finalised text.
Talks resume with the intersessional working group reconvening on 23 November 2026, followed immediately by MEPC 85 from 30 November.
For marine fuel-testing and process-analytics suppliers, the continued absence of a settled pricing mechanism keeps compliance-cost planning for shipowners and fuel suppliers in limbo.
Regardless of which pricing tier or fund structure is ultimately adopted, verified fuel-quality data, GHG intensity calculation and emissions reporting will remain central to compliance under any version of the framework under discussion.
The dispute is over the economic mechanism attached to that data, not whether measurement and verification will be required.
That said, the scale and urgency of near-term investment in testing infrastructure is harder for suppliers to forecast. Shipowners themselves face uncertainty over which compliance pathway, and which cost exposure, will eventually apply.
Continued deferral increases the risk that some operators delay fuel-quality and monitoring investment decisions until the framework's economic terms are settled.
This risk persists even where the underlying measurement requirements are unlikely to change materially between the competing proposals on the table.
PIN 27.4 Aug/Sept 2026
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