Navigating the Decarbonization Imperative: Regulatory Gaps, Financial Viability, and the Future of Zero-Carbon Fuel Governance in International Shipping

Dr. Aditi Suresh Mane

Abstract: Global shipping stands at a pivotal moment in its effort to align with worldwide adopted climate goals. Being accountable for roughly 2.9-3% of whole anthropogenetic greenhouse gases (GHG) emissions, the sector faces escalating burden to evolve towards a net-zero trajectory. The IMO revised its GHG strategy in 2023, aiming net-zero emissions by or around 2050 while diagnosing contradictory nationwide settings. Yet, the existing plan remains disjointed and insufficient. Prevailing mechanisms such as the Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII) highlight incremental operative and technical developments that, by themselves, cannot deliver the transformative decarbonization required. Their focus on competence, absent vigorous fiscal instruments, exposes a grave policy void. The shift to alternate, zero-carbon fuels commands collective investment potentially exceeding USD 1.65 trillion by 2050, generally dedicated to fuel supply infrastructure. This transition is economically hampered by the significantly higher Total Cost of Ownership (TCO) of clean fuels (increasing costs by 124% to 731%). Thus, the absence of a compulsory global Market-Based Mechanism (MBM), such as a substantial carbon levy, forms a critical legal deficit that fails to affect environmental externalities and bridges the competitive cost gap. Combining the issue of IMO's institutional flimsiness; inadequate administrative capacity, ambiguity over its directive to administer large financial instruments, and constant political divisions-mostly around the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC), all these factors have shaped a governance inactivity and regional fragmentation, most visibly in the EU's unilateral initiatives under the Emissions Trading System (ETS) and FuelEU Maritime, which threaten the uniform regulatory framework sought by industry actors. Bridging these economical, legal, and institutional rifts through an obligatory binding global carbon-pricing policy with synchronized infrastructural investment is vital if global shipping is to align credibly with the Paris Agreement's temperature goals.

Keywords: Decarbonization, IMO, Carbon Tax, Alternative Fuels, Regulatory Fragmentation

How to Cite?: Dr. Aditi Suresh Mane, "Navigating the Decarbonization Imperative: Regulatory Gaps, Financial Viability, and the Future of Zero-Carbon Fuel Governance in International Shipping", Volume 14 Issue 10, October 2025, International Journal of Science and Research (IJSR), Pages: 1509-1513, https://www.ijsr.net/getabstract.php?paperid=SR251027195114, DOI: https://dx.doi.org/10.21275/SR251027195114