Why does this matter?  Shipping is a major emitter of greenhouse gases, responsible for 3% of global emissions. Yet, the industry is not covered by the Paris Agreement, posing a significant regulatory gap. In 2023, IMO member states agreed to a goal of achieving net-zero emissions by 2050, with interim targets of reducing emissions by 30% by 2030 and 80% by 2040 compared with a 2008 baseline.

However, the initial agreement did not specify how net zero would be achieved and negotiations on concrete measures have been slow-moving. The latest framework represents a breakthrough with the newly agreed policies slated to shape the trajectory of global shipping going forward.

The new emissions intensity targets have been reduced to 4% in 2028, which will rise to 30% in 2035. And an upper target of17% by 2028 increased  to 43% in 2035. To meet these targets ships are expected to switch to less polluting fuels.

Ships unable to sufficiently reduce their emissions will pay a penalty. If failing to meet the lower targets, ships can purchase “remedial units”  at $380 per unit, which funds the newly established “net-zero fund”. Or, in a carbon credit-style exchange, ships could purchase surplus units from others that have excelled in reducing carbon intensity.

The second tier of penalty applies to ships that meet the lower targets but fail to reach the more stringent upper aims. These ship owners would pay $100 per unit into the net-zero fund. Overall, these agreed costs and targets fall roughly in the middle of targets proposed by member countries.

Two companies in the Ocean 14 Capital portfolio are uniquely positioned to support the IMO’s shift towards cleaner fuels and carbon pricing,  Sofar Ocean, for example, provides crucial ocean data that optimises vessel performance. The company’s high-accuracy weather forecasts and performance models help ships reduce fuel consumption and emissions by providing optimised routing.

Given the IMO’s new rules, Sofar Ocean’s solutions can support the maritime industry’s efforts to meet emission reduction targets, improving fuel efficiency and lowering overall emissions.

Meanwhile, Goodcarbon enables businesses to build long-term carbon credit portfolios through nature-based assets. Its platform supports projects like reforestation and land conservation, which contribute to offsetting carbon emissions. Though they have focused on land-based projects, Goodcarbon is well positioned to become a key player for the maritime industry.

With the IMO’s focus on carbon pricing, Goodcarbon’s solutions offer a vital tool for companies in the shipping industry to meet emissions targets while supporting the transition to a net-zero future.

Although the deal at the IMO represents a significant shift in global maritime regulations, the framework is not without controversy. Some emerging economies and oil-producing nations, such as Saudi Arabia, opposed the carbon pricing measures, arguing they would place a financial burden on global trade and raise commodity prices.

The US also withdrew partway through the negotiations, calling the carbon pricing system “blatantly unfair.” Despite the opposition, the deal was passed through a majority vote, with the framework aiming to raise funds for climate action, including supporting the adoption of low-carbon fuels.

Some critique has been cited by the UCL and the NGO coalition Transport and Environment. which found that the framework would be insufficient to meet the new targets, given that 90% of emissions will escape penalties under the IMO’s rules. The UCL research group sees this agreement as “weak” and a watering down of previous targets from the IMO.

The IMO’s historic agreement takes a crucial step toward reducing shipping emissions, setting clear targets and penalties for non-compliance. Yet, many critics argue that the deal lacks the urgency and ambition required to align with global climate goals, especially as it faces resistance from key stakeholders. Success of the agreement will depend on stronger actions and broader collaboration in the coming years.

Why does this matter? The ocean is the world’s largest carbon sink, absorbing 25% of human-caused CO2 emissions while generating 50% of global oxygen. Yet, rising sea temperatures, pollution and overfishing are threatening marine ecosystems at an alarming rate. The estimated value of key ocean assets in $24tn, with an annual economic output of $2.5tn which represents3-5% of global GDP.

A recent report by Standard Chartered estimates that sustainable aquaculture, blue carbon projects and ocean renewables have the potential to mitigate 40% of greenhouse gas emissions and could unlock $15tn in value, yet lack the catalytic investment needed to scale.

In the face of Trump’s dismissal of climate action, discussions at the Davos 2025 summit highlighted the importance of mobilising capital towards ocean solutions, a crucial opportunity for firms like Ocean 14 Capital, which specialise in funding regenerative marine ventures.

The Founding Partner of Ocean 14 Capital, Chris Gorell Barnes, attended Davos 2025 and moderated the Ocean High-Level Panel: Turning Commitments into Action. Key topics discussed at the panel were digital oceans, addressing the role technology has to play in accelerating ocean action.

Another notable ocean event at Davos 2025, was The Ocean Race which convened world leaders, business executives and policymakers to drive ocean conservation efforts. A high-level roundtable with John Kerry, Prince Albert II of Monaco and Volvo Cars CEO Jim Rowan highlighted marine biodiversity, Marine Protected Areas and the need to reduce marine pollution. The event reinforced the economic and climate resilience benefits of ocean investment.

Blue economy investment is accelerating. The ocean innovation sector has grown by 91% since 2019, with $1bn in early-stage private ocean funds raised in 2022 alone. The #BackBlue commitment has already mobilised $2.7bn in assets, with leading financial institutions aligning investment portfolios with sustainable marine projects.

Seaweed farming, regenerative aquaculture and ocean-based renewables have been highlighted as high-growth sectors, capable of driving both climate resilience and economic returns. Additionally, initiatives such as blue carbon credits and biodiversity-linked financing are creating new revenue streams for coastal communities and conservation projects.

Ocean investment still faces major hurdles despite progress. Overfishing subsidies and weak regulations continue to undermine conservation efforts. Blended finance and early-stage blue economy investments remain risky, particularly in developing regions where policy uncertainty deters institutional investors.

Sustainable aquaculture, while promising, faces disease outbreaks, pollution risks and market volatility, requiring significant de-risking mechanisms to attract long-term capital. Without stronger financial incentives and regulatory frameworks, the momentum from Davos may not translate into tangible change.

Ocean investment is no longer a niche concern, it is becoming increasingly central to the global sustainability agenda. The emergence of blue finance coalitions such as #BackBlue, blue bonds and scalable marine solutions signals a turning point in the way the financial sector approaches coastal and marine conservation. To close the gap between ambition and execution of ocean protection, the key tools are expanding public-private partnerships and aligning regulation to support impactful initiatives.

There are two major ocean protection events upcoming in 2025 – the Blue Economy Finance Forum (BEFF) – in Monaco in early June, and the UN Ocean Conference (UNOC3) – in Nice in mid-June. These events will be key platforms for negotiating ocean protection and helping secure capital for sustainable ocean ventures.

Why does this matter? Decarbonising the shipping sector offers an opportunity to drastically reduce global emissions and align with the Paris Agreement’s climate objectives.

Innovations such as Sofar Ocean’s Wayfinder platform, which uses real-time ocean data to optimise routes and minimise fuel consumption, exemplify how technology can drive transformative change. Additionally, the regulatory atmosphere is further incentivising the green transition for the shipping sector.

Two major policy changes are forthcoming – the EU’s FuelEU Maritime Regulation came into effect on the 1 January this year,  while the UK has proposed the inclusion of shipping in its Emissions Trading Scheme (ETS) by 2026 – which are pivotal in encouraging low-carbon practices.

A primary barrier to lower carbon shipping is cost. Fuels such as biomethane, produced from organic waste including manure cost nearly double that of liquefied natural gas – $21.03 per Gigajoule versus $11.90, respectively, making widespread adoption financially daunting. A second challenge to a green marine transition is the training required to safely and correctly use alternative fuels.

A computer-modelled study suggests that the shift requires upskilling an estimated 450,000 seafarers by 2030 to safely manage hazardous fuels like ammonia, expected to rise to 800,000 by the mid-2030s.

Technological gaps also compound the difficulty. New equipment for emissions reduction and fuel efficiency requires heavy investment without assured returns. Furthermore, regulatory uncertainties make it difficult for shipping companies to plan and attract capital for green transitions.

Despite these obstacles, industry collaboration is yielding promising results. The Zero Emission Maritime Buyers Alliance (ZEMBA), comprising major companies including Amazon and Ikea, is incentivising the use of low-carbon fuels by absorbing the cost premium.

Through this initiative, vessels operated by German Hapag-Lloyd travelling from Rotterdam to East Asia from 2025 will run on biomethane. This is expected to prevent 82,000 mt of CO2 emissions over two years.

The most promising alternative fuels to decarbonise the shipping sector are biomethane, ammonia and hydrogen. Biomethane, derived from organic waste, can reduce emissions by 90% compared to traditional marine fuels.

However, its cost and limited supply pose challenges. Green ammonia, a carbon-free fuel, is created by combining renewable hydrogen from water electrolysis and nitrogen separated from air in a modified Haber-Bosch process, powered entirely by renewable energy.

Ammonia and hydrogen are emerging as viable alternatives, though their adoption requires significant investment in safety measures and port infrastructure.

Beyond fuels, advancements in ship design and digital tools, such as real-time emissions monitoring, are critical to improving efficiency and sustainability.

Sofar Ocean’s global network of ocean sensors provides accurate weather forecasts and performance models, helping vessels optimise their routes. These innovations reduce emissions while offering a scalable solution for the industry.

The road ahead is increasingly defined by collaboration and regulation. The Maritime Decarbonisation Conference in Singapore in April may provide valuable insights into green financing trends and innovative solutions.

Meanwhile, the  FuelEU Maritime Regulation and the UK’s proposed expansion of the ETS will likely accelerate the adoption of low-carbon fuels and energy-efficient practices. Initiatives like the North Sea Green Shipping Corridor, a zero-emissions route, highlight the potential for transformative projects.

Extending carbon credit schemes to shipping could further incentivise investment in sustainable practices, unlocking new opportunities for the sector. Shipping has the potential to transition from an emissions-intensive industry to a global exemplar of sustainable trade.

Why does this matter? International shipping is a fundamental facet of the global economy and trading network, facilitating the international transfer of goods. Artificial waterways are a crucial component, cutting thousands of miles from sea routes.

The Suez Canal, for example, connects the Mediterranean to the Red Sea, saving 6,000 nautical miles and reducing delivery times by three to four weeks compared to routing around Africa.

Last year, 24,000 vessels passed through the Suez Canal, carrying 10% of global seaborne trade. Disruptions to this waterway are costly – the last time shippers faced an impassable Suez Canal was in 2021 when the Ever Given cargo ship ran aground, estimated to have held up $9.6bn worth of trade per day.

The impact of shipping remains high even in the absence of disruptions to routes, accounting for around 3% of global emissions – roughly equivalent to the aviation sector. Estimates suggest that shipping could represent 10% of global emissions by 2050 if current growth rates continue unabated. Shipping executives are reportedly cautious to restart operations in the Red Sea region, suggesting elevated shipping emissions are likely to continue for some time.

The shipping industry has taken steps to increase fuel economy and decrease emissions in recent years. For example, ships have followed a “slow steaming” policy over the last decade, which involves reducing operational speed, conserving fuel, and cutting emissions of CO2 and air pollutants.

However, shipping giants Møller-Maersk and Hapag-Lloyd have announced they are suspending this practice and increasing vessel speeds due to the additional time the alternative route enforces.

The shipping industry is likely to face increasing regulation in the coming years. In July 2023, the International Maritime Organization (IMO) announced stricter decarbonisation targets, including a goal of achieving net-zero emissions from international shipping “close to” 2050.

The body also established interim goals of reducing emissions by 20-30% by 2030 and 70-80% by 2040, compared to 2008 levels. The current geopolitical crisis in the Middle East poses a serious risk to these goals, sending the industry’s emissions in the wrong direction.

The Suez Canal is not the only major waterway facing significant reductions in traffic. Drought in Central America has severely impacted maritime trade passing through the Panama Canal, which links the Caribbean Sea with the Pacific Ocean.

Around 2.5% of seaborne trade passes through the canal, but due to a severe drought-induced reduction to the level of the Gatun Lake that feeds the waterway, the canal’s water levels are far lower than usual. Consequently, the Panama Canal Authority has reduced traffic through the corridor by approximately 40% this year.

Addressing this issue, SOFAR Ocean have deployed the world’s largest privately-owned network of ocean sensors. Each day, this network provides the company with over 1.5 million observations, populating marine weather models up to 50% more accurately than traditional models.

This is combined with vessel performance models – used to determine high-accuracy speed and fuel predictions – to create the powerful Wayfinder platform. This data-driven service reduces voyage time, fuel and emissions by 4-6% on average, presenting an attractive option for the maritime industry in the face of an escalating crisis.

On Jane Fraser’s first day as chief executive officer at Citigroup, she announced plans to achieve net-zero greenhouse-gas emissions in the bank’s financing activities by 2050. Finance has finally caught up to climate’s threat to the stability of the financial system.

Yet despite the fact that the oceans cover some 71% of the planet, produce at least 50% of the oxygen, and are the main source of protein for more than 1bn people, few leaders seem to have grasped the fact that climate and oceans are inextricably linked.

Speaking at the Sustainable Finance Forum in Abu Dhabi, Peter Thomson, the UN Secretary-General’s Special Envoy for the Ocean, said: “We can’t have a healthy planet without a healthy ocean. That is why sustainable finance for the sustainable blue economy is of vital importance to us all.”

Greenland’s ice sheet is likely to disappear regardless of how quickly greenhouse gas emissions are reduced, with annual snowfall insufficient to replenish the snow and ice lost during summer melting, according to a study from Ohio State University. The research was based on 234 Arctic glaciers during the 34 years to 2018. The loss of all of Greenland’s ice would raise sea levels by six metres, causing many coastal cities to flood. The Arctic has been warming at twice the rate of the rest of the world for the last 30 years.

The Ohio study investigates the Greenland ice sheet’s mass balance – the net of mass gained by snow accumulation in its interior and lost from ice melting at its edges – which was stable in the 1990s but has been falling since, and at an increasing pace.

It finds Greenland’s outlet glaciers are speeding up due to increased “calving” – where ice breaks off glacier termini. The authors state that glacier retreat in the early 2000s switched the ice sheet to operate in a new dynamic, where its shrinkage will be sustained even if temperatures stabilise. This could result in a sea level rise of over six metres by the year 3000.

A separate study published this month uses satellite measurements to estimate the ice sheet lost one million mt of ice per minute across 2019, totalling 532 billion mt, which is double the average rate post-2003. The authors suspect 2019’s loss – the largest in centuries, and potentially millennia – is due to changing atmospheric dynamics that hold warmer air over the ice sheet. These are themselves the result of climate change.

Looking more broadly, a further academic review of all land-based ice has found the Earth’s surface has lost 28 trillion mt of ice since 1994. This rate, which will result in a metre of sea level rise by 2100, is tracking the Intergovernmental Panel on Climate Change’s worst-case scenario for ice loss.

Sources:

Nature Communications Earth and Environment

Reuters

https://uk.reuters.com/article/us-climate-change-arctic/canary-in-the-coal-mine-greenland-ice-has-shrunk-beyond-return-study-finds-idUKKCN25A2X3