KUCHING (June 11): Shipping costs are expected to rise by 2027 following the International Maritime Organisation’s (IMO) decision to impose carbon fees on large vessels, according to analysts at AmInvestment Bank Bhd.

The research house in a note on Wednesday said this move could impact Malaysia’s trade and logistics sectors.

Under the IMO Net Zero Framework voted in by a majority of IMO member states in April this year, ships larger than 5,000 tonnes that emit carbon emissions beyond a stipulated threshold will be required to pay a fee of US$100 per excess tonne of carbon.

This fee could increase to as much as US$380 per tonne, starting in 2028, after the framework is adopted in October 2025 and implemented the following year.

Malaysia, along with Russia, Saudi Arabia and Thailand, voted against the framework. Meanwhile, the United States withdrew from the talks midway. Countries that supported the agreement include the EU, China and India.

“We think that the carbon fees, which are akin to a tax, would raise shipping costs in 2027F. Currently, we have a ‘buy’ call on MISC Berhad with a target price of RM8.50 per share,” it said.

It noted that shipping will become the first industry to face a global carbon tax.

According to the IMO, the sector accounts for about 3 per cent of total global greenhouse gas (GHG) emissions.

The framework aims to cut emissions intensity by 4 per cent in 2028 and 30 per cent in 2035 and ultimately achieving net zero emissions by 2050.

Meanwhile, fees collected from non-compliant vessels will be channelled into a “Net Zero Fund”.

Researchers estimate that the framework could raise between US$11 billion and US$12 billion annually in its first three years.

The fund will finance infrastructure and green transition efforts in developing countries while also addressing negative impacts on small island and least developed nations.

To avoid the fees, large carriers can switch to a more environmentally friendly fuel such as biofuel or ammonia, buy surplus units from low-emitting vessels or buy remedial units by contributing to IMO’s Net Zero Fund.

Most large shipping firms like AP Moller-Maersk, COSCO Shipping, and Mediterranean Shipping Company are expected to be impacted as the majority of their fleets still run on diesel and exceed the 5,000-tonne threshold.