Impact of Carbon Emissions Rules on US Sea Freight: What Shippers Must Know

Carbon emissions regulations are rapidly transforming the sea freight landscape in the United States. Driven by climate change concerns and international commitments, these regulations aim to reduce greenhouse gas (GHG) emissions across the maritime sector.

For shippers, this represents both a challenge and an opportunity: the need to comply with new laws while optimizing operations and improving sustainability performance. 

Sea freight, while efficient for large-volume transport, contributes significantly to global CO₂ emissions. Governments and international bodies like the International Maritime Organization (IMO) and the U.S. Environmental Protection Agency (EPA) are enforcing stricter standards to curb this impact. 

Key Regulatory Drivers Affecting US Sea Freight 

The IMO’s Sulphur Cap and Carbon Reduction Strategy 

The IMO 2020 regulation marked a turning point, limiting sulphur content in marine fuel to 0.5%. This move drastically cut sulfur oxide emissions, improving air quality around ports and shipping lanes. Looking ahead, the IMO is also implementing measures under its Greenhouse Gas Strategy, which seeks to cut shipping emissions by 50% by 2050. 

These regulations have led to widespread fuel switching and investment in new vessel technologies. 

US Domestic Regulations and EPA Oversight 

In the US, the EPA enforces the Clean Air Act, which includes standards for marine engines and fuels. Emission Control Areas (ECAs) along US coastlines mandate lower sulphur emissions. Additionally, many US ports have begun to adopt stricter local emissions policies, encouraging shippers to choose cleaner vessels and comply with sustainability guidelines. 

How Regulations Influence Operational Costs 

Fuel Switching: LNG, Biofuels, and Low‑Sulphur Fuels 

One of the most significant cost impacts arises from fuel switching. To meet sulphur and GHG limits, many carriers now use: 

• Liquefied Natural Gas (LNG): Offers lower emissions but requires retrofitting. 

• Biofuels and e-fuels: Renewable but costly and in limited supply. 

• Very Low Sulphur Fuel Oil (VLSFO): A go-to compliance option but more expensive than traditional bunker fuels. 

These changes affect freight rates, fuel surcharges, and operational planning for shippers. 

Carbon Pricing and Emissions Trading Schemes 

Several regions are exploring or implementing carbon pricing mechanisms. These include: 

• Cap-and-trade systems: Limiting total emissions while allowing trade of emission allowances. 

• Carbon offset programs: Investing in reforestation or renewable projects to neutralize emissions. 

While not yet fully standardized in the US maritime sector, these trends are emerging as tools for compliance and risk management. 

Impacts on Shipper Practices and Supply Chains 

Contract Negotiations and Surcharges 

Shippers now face contracts with emissions-related clauses, such as: 

• Green surcharges: Fuel or emissions cost pass-throughs. 

• Performance benchmarks: Minimum sustainability metrics for carriers. 

Understanding and negotiating these terms is critical to managing long-term shipping costs and compliance risks. 

Carrier Selection Based on Emissions Performance 

Sustainability is becoming a key selection criterion. Carriers offering: 

• Modern, energy-efficient vessels 

• Slow steaming strategies 

• Transparent emissions reporting 

are increasingly preferred. This trend encourages shippers to engage deeply in emissions accountability and supply chain decarbonization. 

Technologies and Strategies to Reduce Sea Freight Emissions 

Vessel Efficiency Technologies 

To comply with regulations and cut fuel costs, many carriers invest in: 

• Dual-fuel engines 

• Advanced hull coatings 

• Air lubrication systems 

• Wind-assisted propulsion (e.g., rotor sails) 

These upgrades not only meet emissions limits but also enhance fuel economy and reliability. 

Digital Tools and Data Transparency 

Digitalization helps monitor and report emissions: 

• Voyage optimization software minimizes fuel use. 

• Emission tracking tools enable Scope 3 reporting. 

• Blockchain systems ensure data accuracy and integrity. 

Shippers using such tools benefit from increased visibility and simplified ESG compliance. 

What US Shippers Must Do to Stay Ahead 

Assess Emissions Footprint and Reporting Needs 

Understanding your carbon footprint, especially Scope 3 emissions, is foundational. Many companies now face pressure from investors, partners, and regulators to disclose their total environmental impact. 

Engage Carriers and Use Green Contract Terms 

Proactive communication with carriers allows shippers to: 

• Demand emissions reports 

• Embed sustainability clauses in freight contracts 

• Participate in green shipping alliances 

These steps ensure alignment with internal ESG goals and regulatory compliance. 

Invest in Alternative Fuels and Technologies 

Forward-looking shippers are: 

• Co-investing in LNG infrastructure 

• Partnering in biofuel trials 

• Supporting electrification of port operations 

These efforts not only reduce emissions but also enhance brand value and future-proof operations. 

Upcoming Regulations and Trends 

Several trends will define the next decade: 

• IMO GHG targets will tighten, potentially requiring carbon-neutral operations by 2050. 

• The US may adopt a Carbon Border Adjustment Mechanism, taxing imported goods based on carbon content. 

• Port electrification and onshore power supply will become standard at major US ports, requiring compatible vessels. 

Shippers must stay agile, adapt to new norms, and participate actively in shaping sustainable freight solutions. 

Conclusion 

Carbon emissions regulations are reshaping the landscape of US sea freight. Shippers must be informed, proactive, and strategic in adapting to new requirements. By embracing fuel innovation, sustainability reporting, and collaboration with eco-friendly carriers, companies can stay ahead of the curve while contributing to a greener shipping industry. 

Staying compliant isn’t just about avoiding penalties—it’s about leading in the new era of responsible logistics. 

FAQs 

What is the IMO 2020 regulation?
It limits marine fuel sulphur content to 0.5% to reduce air pollution globally. 

How do emissions regulations affect freight rates?
Compliance costs raise fuel expenses and can lead to green surcharges passed on to shippers. 

Are US ports enforcing stricter emissions rules?
Yes. Many have local clean air programs, shore power mandates, and incentive schemes for low-emission vessels.