Policy Challenges in Shipping: Equity, Developing Nations, and Climate Justice

Explore policy challenges in shipping through equity, developing nations, and climate justice. Learn how IMO rules and global trade shape a just transition.

When delegates at the International Maritime Organization (IMO) adopted the revised GHG Strategy in July 2023, they set the course for shipping to achieve net-zero greenhouse gas emissions by 2050. It was a defining moment, one that drew applause from many climate advocates. But beneath the celebration lay complex tensions: how to ensure that the transition is fair and equitable, especially for developing nations that depend heavily on maritime trade yet have limited resources to finance green transitions.

Shipping, which transports over 80% of global goods (UNCTAD, 2023), accounts for nearly 3% of global emissions. While the sector must decarbonize, the question of who pays, who benefits, and who bears the risks has become central. This is where climate justice enters the debate: ensuring that policies do not disproportionately burden countries and communities that are least responsible for historical emissions.

This article explores the policy challenges in shipping through the intertwined perspectives of equity, developing nations, and climate justice. It examines why the issue matters, highlights technological and policy developments, outlines the key challenges, explores real-world case studies, and discusses possible pathways toward a just maritime transition.

Why This Topic Matters in Maritime Operations

Shipping’s climate policies are not only environmental—they are economic and political. The way they are designed will determine whether developing nations are partners or victims in the transition.

Climate Inequality in Maritime Trade

  • Developed nations: Possess capital, technology, and research capacity to adopt low- and zero-carbon fuels faster.

  • Developing nations: Depend on affordable shipping to sustain imports and exports. Rising freight costs due to carbon pricing or new fuel expenses could destabilize fragile economies.

IMO’s Dilemma: Fairness vs Uniformity

Unlike the UNFCCC (climate treaty), which is based on Common but Differentiated Responsibilities (CBDR), the IMO operates on the principle of “no more favorable treatment”. This ensures a level playing field, but it creates conflict when vulnerable nations ask for special financial support or exemptions.

Seafarer Justice

Around 90% of seafarers come from developing nations such as the Philippines, India, Indonesia, and African states. Policies must ensure that training, safety, and fair employment opportunities accompany the shift to alternative fuels and digitalized operations.

Strategic Importance

If climate justice is overlooked, fragmentation may result: regional regimes like the EU ETS could dominate, undermining IMO’s authority and creating inequities in global trade routes.

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Key Developments, Innovations, or Technologies

IMO’s 2023 GHG Strategy

The 2023 IMO GHG Strategy represents the most ambitious climate framework ever adopted for international shipping. At its heart lies a commitment to achieve net-zero greenhouse gas emissions by or around 2050, a goal supported by interim targets: a 20–30% reduction by 2030 and 70–80% by 2040, compared to the 2008 baseline. These milestones are deliberately staged to ensure that the sector cannot defer action until the mid-century deadline but must demonstrate measurable progress within the next decade.

The strategy was the product of long and often heated negotiations. While the targets reflect a compromise between ambition and feasibility, they mark a turning point: shipping is now on a defined decarbonization pathway, and the regulatory direction is clear. For shipowners, financiers, and fuel suppliers, the 2023 strategy provides not only a climate mandate but also a business signal: investments made today must be compatible with a zero-carbon future.

Equity and the Role of Developing States

Equity was the defining theme of the 2023 negotiations. Small Island Developing States (SIDS) and Least Developed Countries (LDCs), which face disproportionate risks from climate change, pushed strongly for more ambitious targets. For them, limiting global warming is not abstract policy but a matter of survival—rising sea levels and intensifying storms already threaten their economies, populations, and very existence.

At the same time, these states argued that they should not be asked to shoulder the same costs as larger, wealthier economies. Many of their ports, fleets, and maritime administrations lack the technical and financial capacity to adopt alternative fuels or meet new reporting requirements without support. As a result, the IMO strategy is closely linked to capacity-building and financial assistance mechanisms, ensuring that the transition is not only ambitious but also fair.

Market-Based Measures (MBMs) and the Carbon Levy Debate

One of the most contentious issues in the IMO’s climate talks was the role of Market-Based Measures (MBMs)—economic instruments designed to put a price on emissions. A landmark proposal came from the Marshall Islands and the Solomon Islands, which called for a global carbon levy of $100 per tonne of CO₂ emitted. The dual objective of this levy is to accelerate decarbonization by making fossil fuels more expensive and to raise funds for climate adaptation and infrastructure development in vulnerable states.

The equity debate around MBMs is central. Critics argue that a levy could raise shipping costs and disproportionately impact developing economies that depend on maritime trade. Proponents counter that if revenues are redistributed fairly, MBMs could become a tool for justice rather than a burden. The idea of channeling levy revenues into a climate transition fund—supporting zero-carbon infrastructure in Africa, South America, and Pacific Island nations—has gained traction as a way to ensure that the transition is truly global.

Although the IMO has not yet reached consensus on the design of such a mechanism, the 2023 strategy explicitly acknowledges the need for a global carbon-pricing instrument. Negotiations over the coming years will determine whether shipping adopts a levy, a trading system, or a hybrid model.

Technology and Fuel Pathways

Alongside carbon pricing, the IMO strategy highlights the critical role of fuel and technology innovation. Options such as methanol, ammonia, and hydrogen are advancing rapidly, with shipbuilders and engine manufacturers already delivering dual-fuel and prototype vessels.

However, the geography of innovation is highly uneven. The infrastructure for these fuels—production facilities, bunkering stations, and pilot projects—is concentrated in advanced economies, particularly in Northern Europe, East Asia, and North America. Ports in Africa and South America are often absent from early deployments, raising concerns about marginalization in global trade. If ships transition to fuels that are only available in a limited number of regions, ports without access risk being bypassed, undermining their competitiveness and connectivity.

This imbalance has transformed fuel adoption into not just a technical issue but also a geopolitical one. Ensuring that developing regions have access to scalable zero-carbon fuels is now seen as essential for a just and inclusive maritime transition.

A Just Transition for Seafarers

Beyond ships and ports, the IMO strategy also addresses the human dimension of decarbonization. The shift to new fuels and technologies will profoundly change the skills required at sea. Handling ammonia, hydrogen, or methanol poses very different safety challenges than conventional fuels. Without adequate training, seafarers could be exposed to toxic hazards, fire risks, or complex digital systems for which they are unprepared.

Organizations such as the International Labour Organization (ILO) and the International Transport Workers’ Federation (ITF) have been vocal in calling for a “Just Transition” for seafarers. This includes comprehensive retraining programs, updated safety protocols, and international standards to ensure that crews from all backgrounds—particularly those from developing nations, who make up the majority of the maritime workforce—can operate the ships of the future safely and competently.

The IMO’s Integrated Technical Cooperation Programme (ITCP) is being scaled up to deliver this training, alongside technical support for maritime administrations in developing states. By embedding workforce development into its climate roadmap, the IMO acknowledges that decarbonization is not only about fuels and technologies but also about people.

A Strategy Rooted in Ambition and Fairness

Taken together, the 2023 IMO GHG Strategy is more than just a climate target—it is a comprehensive roadmap that links technology, finance, and equity. Its success will depend on striking a balance: maintaining ambitious emission reductions, while ensuring that the costs and benefits of the transition are shared fairly across the global maritime community.

If carbon pricing revenues are redistributed effectively, if fuel infrastructure expands beyond traditional hubs, and if seafarers are trained for the realities of new propulsion systems, the strategy could set the shipping industry on a path to not only decarbonization but also greater inclusivity and resilience.

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Challenges and Practical Solutions

Challenge 1: Disproportionate Burden on Developing Nations

  • Problem: Higher fuel and freight costs may hit import-dependent economies hardest.

  • Solution: Establish revenue redistribution mechanisms (e.g., Green Climate Fund-style maritime fund).

Challenge 2: Technology Access Gap

  • Problem: Infrastructure for green fuels is concentrated in Europe and East Asia.

  • Solution: Finance inclusive green corridors that incorporate Global South ports.

Challenge 3: Workforce Inequities

  • Problem: Seafarers may be unprepared for alternative fuel operations.

  • Solution: Update STCW Convention with mandatory training on LNG, methanol, ammonia, and hydrogen handling.

Challenge 4: Regional vs Global Measures

  • Problem: EU ETS adds costs to ships trading with Europe, creating a fragmented system.

  • Solution: Accelerate global IMO-led MBM adoption to avoid regional disparities.

Challenge 5: Trust and Governance

  • Problem: Developing nations often feel excluded from agenda-setting.

  • Solution: Strengthen representation of SIDS and LDCs in IMO decision-making bodies.

Case Studies / Real-World Applications

Marshall Islands and Solomon Islands: Carbon Levy Leadership

Though their emissions are negligible, these Pacific states proposed bold carbon levies, reframing the debate around existential survival rather than economics.

EU ETS Expansion and African Concerns

The inclusion of shipping in the EU ETS (2024) triggered concerns among African exporters, who warned that carbon costs would reduce competitiveness in Europe-bound trade.

Clydebank Declaration Green Corridors

While celebrated as a breakthrough, most announced green corridors link developed nations. The exclusion of Global South ports underscores the equity challenge.

Philippines: Seafarer Training Adaptation

As the world’s largest supplier of seafarers, the Philippines has begun updating curricula for alternative fuel handling, highlighting proactive adaptation but also the need for global funding support.

Future Outlook & Trends

  1. Global MBM Adoption
    By 2030, expect the IMO to approve a global carbon levy with redistribution mechanisms for equity.

  2. Green Corridors with Equity
    Future corridors will increasingly integrate developing nation ports to ensure inclusivity.

  3. Stronger Workforce Focus
    IMO, ITF, and ILO will expand just transition programs for seafarers.

  4. Regional vs Global Dynamics
    EU ETS may accelerate IMO action, but risks remain if global alignment is delayed.

  5. Climate Justice Mainstreaming
    By the 2030s, climate justice will be embedded in all IMO negotiations, shaping not just goals but also financing.

Frequently Asked Questions (FAQ)

1. What is climate justice in shipping?
Ensuring that costs and benefits of maritime decarbonization are distributed fairly, especially for vulnerable nations.

2. Why are developing nations concerned about carbon pricing?
Because it raises freight costs, potentially harming their economic competitiveness.

3. Does the IMO recognize equity?
Yes, but it balances equity with the need for uniform global standards.

4. How can seafarers be protected?
Through training, fair labor policies, and just transition frameworks supported by IMO and ILO.

5. What role do regional measures like the EU ETS play?
They drive decarbonization but risk creating fragmentation and unfair trade impacts.

6. How can revenue from carbon pricing be used fairly?
By funding adaptation, infrastructure, and training programs in developing nations.

7. Will climate justice slow decarbonization?
Not necessarily—if integrated properly, it can accelerate adoption by making policies politically viable.

Conclusion

The journey to net-zero shipping is not only about technology and fuels—it is about justice, equity, and survival. Developing nations, seafarers, and vulnerable communities must not be left behind.

The IMO and regional actors must build a system where ambition meets fairness, where carbon pricing revenues flow back to those most in need, and where seafarers are trained for tomorrow’s challenges.

Shipping has always been about connecting the world. Now, its policies must also connect justice with decarbonization—ensuring a future that is not only sustainable but also equitable.

References

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