This report provides an overview of the environmental impact of shipping. The environmental issues covered in this report are airborne emissions from the combustion of bunker fuel, oil spills, introduction of alien species through ballast water, discharges of toxic chemicals into the marine environment from anti-fouling systems and waste, shoreline erosion and dismantling of ships. This is followed by a presentation of various policy measures that exist today and seek to limit the environmental impact of shipping, at local, national, EU and international (International Maritime Organization, IMO) level. Furthermore, instruments that are under discussion within the EU and IMO, e.g. a maritime emission trading scheme, are presented. Finally, further research questions with socio-economic relevance are suggested based on the material presented in this report. The questions under consideration are as follows: Guidelines for the calculation and valuation of maritime externalities, analysis of policy instrument impact on the emission dispersion, the design and consequences of an emission trading scheme for carbon dioxide as well as carbon dioxide differentiated fairway dues.