ITALY: An Introduction to Shipping

Navigating Choppy Waters: How Economic and Geopolitical Currents Are Steering the Shipping Industry

The maritime industry is currently operating within a global context characterised by a convergence of economic and geopolitical pressures that are having direct legal and commercial implications. Among the most significant factors are the persistence of international armed conflicts, the imposition of tariffs by the United States and the increasing use of international sanctions as an instrument of foreign policy. These unfortunate realties pose specific legal challenges for maritime stakeholders, particularly concerning contractual performance, liability allocation, regulatory compliance and the resolution of cross-border disputes.

International conflicts – such as the ongoing war between Russia and Ukraine, the escalation of hostilities in the Middle East and the Houthi attacks on commercial vessels in the Red Sea – have caused disruptions affecting insurance coverage, seafarers’ safety and labour conditions, as well as the fulfilment of contractual and logistical obligations. Legal assessment of such circumstances requires a case-by-case approach focused on the conflict’s geographic scope, the commercial relationships between the states involved, and the applicable legal framework. For instance, disputes arising from hostilities in the Middle East or Houthi attacks on vessels in the Red Sea are generally governed by legal systems other than Italian law. Conversely, the Russia-Ukraine conflict has had direct consequences on the maritime sector in several European states, including Italy. These consequences include a significant increase in the cost of energy, with attendant inflationary pressures, as well as logistical and operational challenges stemming from the enforcement of sanctions and related trade restrictions in the regions affected by the conflict.

In parallel, the introduction of additional tariffs by the United States on a wide range of strategic goods also represents a legally relevant development for the shipping sector. These measures have disrupted established trade patterns and increased the cost and complexity of transport operations. From a legal standpoint, the imposition of such duties impacts both existing and future contractual arrangements involving the supply of goods to the US market. In existing contracts, increased fiscal burdens may render contractual performance substantially more onerous than reasonably foreseeable at the time of contract conclusion, potentially triggering hardship clauses or other remedial mechanisms under applicable law. These circumstances underscore the necessity for enhanced diligence in contract drafting, especially regarding tariff risk allocation, price adjustment clauses, compliance obligations and governing law provisions.

Lastly, the intensified use of international sanctions to exert economic pressure on their target has become an increasingly prevalent foreign policy tool, with significant implications for the shipping sector. Sanctions targeting states, individuals, and corporate entities – including shipping companies and operators – impose extensive compliance obligations, restrict access to insurance and financial services, and often affect the validity and enforceability of contractual obligations. Currently, the most extensive sanctions are imposed on the Russian Federation with a complex legal framework that in the EU is mainly provided by Regulations (EU) No 833/2014 and EU No 269/2014. However, business relationships are also impacted by the USA secondary sanctions regime, which provides that non-US persons doing business with sanctioned persons (sanctioned individuals, entities controlled by them, residents of sanctioned countries, etc) may be subject to sanctions under US law. Such sanctions often result in effective exclusion from the US financial system. They may also result in a prohibition on all US persons from dealing with the sanctioned person, including a prohibition on US banks from providing financing and a prohibition on other US companies from trading or providing services.

Recent Developments in the Shipping Sector and Relevant New Legislation

The most significant developments currently affecting the shipping sector concern the transition toward low-carbon and zero-carbon operations, aligned with international efforts to address climate change. The ongoing regulatory shift within the maritime sector is principally rooted in the European Union’s climate strategy, launched with the adoption of the European Green Deal in 2019 and further implemented through the “Fit for 55” legislative package in 2021.

Within this context, the maritime sector is addressed specifically through the adoption of two directives – the Emissions Trading System (ETS) Directive and the Energy Taxation Directive (ETD) – and two regulations: the FuelEU Maritime Regulation and the Alternative Fuels Infrastructure Regulation (AFIR).

The ETS Directive (Directive 2003/87/EC, as amended by Directive (EU) 2023/959), extended to maritime transport from 2024, imposes on shipping companies a duty to comply with a carbon pricing mechanism, requiring the purchase of emission allowances for each tonne of CO₂ emitted. The Directive (EU) 2023/959 also sets out a revision clause – allowing for the amendment of the EU framework – applicable in the event of overlapping international regulation if the International Maritime Organization (IMO) adopts global market-based measures for greenhouse gas (GHG) emissions. This provision – as will be further explained below – has gained immediate relevance following the adoption of IMO mid-term measures at the 83^rd session of the Marine Environment Protection Committee (MEPC 83).

In parallel, The FuelEU Maritime Regulation (Regulation (EU) 2023/1805) sets binding targets for progressively reducing the GHG intensity of the energy used onboard ships. It also mandates the use of onshore power supply (OPS) or zero-emission fuels while at berth. The regulation establishes a penalty system, with revenues – under Article 23(11) – to be reinvested in the maritime sector to support decarbonisation operations. However, from a legal and operational standpoint, the current absence of a designated national authority responsible for managing these revenues poses governance challenges and may undermine the regulation’s effectiveness. In line with the approach adopted under the ETS Directive, Article 30(5) of the FuelEU Maritime Regulation stipulates that, should the IMO adopt a global GHG fuel standard or impose global limits on the GHG intensity of energy used on board ships, the European Commission shall be required to review and – if necessary – amend the regulation to ensure consistency with the international regime.

At international level, the IMO has progressively aligned its policy objectives, initially adopting short-term measures – such as the Carbon Intensity Indicator (CII) and the Ship Energy Efficiency Management Plan (SEEMP) – and more recently, through mid-term regulatory instruments adopted at MEPC 83. These instruments have established a new global framework for regulating the carbon intensity of marine fuels, including annual reduction targets and a global GHG intensity registry.

From a legal perspective, the coexistence of the EU and IMO regimes raises concerns over the possibility of regulatory overlap, mutual recognition and the risk of double imposition. As mentioned above, the EU legislation includes revision clauses intended to align its regulatory frameworks with measures adopted by the IMO. Nonetheless, even in achieving such alignment, there is a tangible risk of both duplicate documentary requirements and a doubling of the regulatory burden. Indeed, it is not guaranteed that the IMO will accept the regulations already established by the European Commission, nor that the Commission will fully relinquish its existing rules.

It is therefore essential to promote the gradual and co-ordinated legal harmonisation of the EU and IMO frameworks to ease compliance burdens and to avoid regulatory fragmentation that could distort competition and reduce the attractiveness of EU ports. Concrete measures include revising both the ETS Directive and the FuelEU Maritime Regulation in light of IMO measures, introducing mutual recognition mechanisms between compliance systems, strengthening national representation in international decision-making processes, and safeguarding the competitiveness of national port systems through compensatory measures for the most vulnerable segments.