IMO Net-Zero Framework

The IMO Net-Zero Framework is the suite of amendments to MARPOL Annex VI approved at the 83rd session of the Marine Environment Protection Committee (MEPC 83) in London on 11 April 2025, comprising the GHG Fuel Intensity (GFI) standard and a global economic instrument operating through Remediation Units (RUs), the Direct Compliance Threshold (DCT) and the IMO Net-Zero Fund. The framework is the operative instrument by which the IMO implements the mid-term measures of the 2023 Revised IMO GHG Strategy, and it is the first global GHG pricing mechanism for any international transport sector. Adopted by majority vote at MEPC 83, scheduled for formal adoption at MEPC 84 in October 2025 and for entry into force on 1 January 2027 under the tacit acceptance procedure, the framework applies to all ships of 5,000 GT and above engaged on international voyages and operates on a well-to-wake (WtW) basis using the lifecycle GHG accounting methodology of the IMO LCA Guidelines (Resolutions MEPC.376(80) and MEPC.391(82)). Each ship reports its annual fuel consumption through the existing IMO Data Collection System (DCS) infrastructure; the system computes an attained GFI in grams CO₂-equivalent per megajoule and compares it against the year’s Required GFI and the tighter Direct Compliance Threshold to determine the ship’s compliance position. Ships exceeding the Required GFI must surrender Remediation Units at a price set by the IMO; ships at or below the DCT earn Surplus Units that may be banked or traded. ShipCalculators.com hosts the principal computational tools: the GFI attained calculator computes the weighted-average WtW intensity from a fuel mix using the MEPC.391(82) default values, and the GFI compliance calculator integrates the full framework end-to-end, returning the Required GFI for the year, the Direct Compliance Threshold, the RU obligation or SU credit, and the total USD cost at a user-set RU price. A full listing is available in the calculator catalogue.

Contents

Background and history

From Initial Strategy to MEPC 83

The IMO Net-Zero Framework is the operative instrument by which the IMO implements the mid-term measures identified in the 2018 Initial IMO Strategy and concretised in the 2023 Revised IMO Strategy. The Initial Strategy, adopted at MEPC 72 by Resolution MEPC.304(72), envisaged a basket of short-term, mid-term and long-term measures. The short-term measures were operationalised through the 2021 amendments to MARPOL Annex VI (Resolution MEPC.328(76)) introducing the Energy Efficiency Existing Ship Index (EEXI), the Carbon Intensity Indicator (CII) and the Ship Energy Efficiency Management Plan Part III. The mid-term measures, comprising a technical element (a GHG Fuel Standard) and an economic element (a pricing mechanism), were the subject of detailed negotiations between MEPC 76 in 2021 and MEPC 83 in 2025.

The 2023 Revised Strategy, adopted at MEPC 80 by Resolution MEPC.377(80), established the political mandate for the mid-term measures by setting the vision of net-zero GHG emissions from international shipping by or around 2050, the indicative checkpoints of at least 20% (striving for 30%) emissions reduction by 2030 and at least 70% (striving for 80%) by 2040, and the 2030 target for zero or near-zero GHG emission technologies, fuels and energy sources to represent at least 5% (striving for 10%) of the energy used by international shipping. The mid-term measures basket of measures was the practical instrument that the Revised Strategy required to deliver these targets.

Architectural choices 2023 to 2025

Between MEPC 80 in July 2023 and MEPC 83 in April 2025, the Intersessional Working Group on GHG Emissions from Ships (ISWG-GHG) and MEPC’s plenary debated five principal architecture options:

Option A: Pure GHG Fuel Standard (GFS), no economic instrument.
Option B: GFS plus a flat per-tonne contribution into a fund (the so-called Marshall Islands proposal of USD 100 per tonne CO₂ on bunker fuel).
Option C: GFS plus a cap-and-trade system with global allowance allocation.
Option D: GFS plus a “feebate” using Remediation Units for non-compliance and Surplus Units for over-compliance.
Option E: Cap-and-trade only, with no GFS.

The Net-Zero Framework approved at MEPC 83 is essentially Option D, modified to include a Fund mechanism similar to that proposed in Option B for the use of the RU revenue. The choice was driven by three considerations:

The need for regulatory certainty: the GFS provides a clear maximum GHG intensity that fuel suppliers and shipowners can plan against, supporting capital investment in low-carbon fuel infrastructure and zero-emission ships.
The need for an economic incentive that scales with the cost gap between conventional and low-carbon fuels: the RU/SU mechanism provides a price signal that increases as ships diverge further from the Required GFI, while rewarding over-compliance.
The need to address just and equitable transition concerns: the IMO Net-Zero Fund mechanism allows the revenue generated by RU surrender to be channelled to decarbonisation infrastructure investment in developing states, in particular Small Island Developing States (SIDS) and Least Developed Countries (LDCs).

MEPC 83 plenary and the majority vote

MEPC 83 met in London from 7 to 11 April 2025 under the chairmanship of Hideaki Saito of Japan. The Net-Zero Framework was the principal substantive item on the agenda, and the plenary spent four days in detailed line-by-line negotiation of the draft amendments to MARPOL Annex VI Chapter 4. The final text was approved on the morning of 11 April by a vote of 63 in favour, 16 against and 24 abstaining (out of 173 voting Parties present and voting). The vote was the first time in the IMO’s history that a major MARPOL amendment has been approved by majority rather than consensus; the majority vote was triggered when consensus could not be reached on the price of Remediation Units in the initial implementation period.

The dissenting votes were cast principally by oil-exporting states (Saudi Arabia, the United Arab Emirates, Iran, Russia and Venezuela), a number of Latin American states (Argentina, Brazil and Uruguay) and a small number of Asian and African members. The principal grounds of dissent were the impact on the export economies of those states (whose long-distance maritime trade routes would face higher transport costs) and the lack of revenue-allocation guarantees for developing-country bunkering infrastructure. The 24 abstaining states included China, India and South Africa, which voiced support for the framework in principle but objected to specific elements of the implementing detail.

The text approved at MEPC 83 will be formally adopted at MEPC 84 in October 2025 under the IMO tacit acceptance procedure of MARPOL Article 16. Entry into force is scheduled for 1 January 2027, sixteen months after formal adoption, with first reporting and surrender obligations applying to the 2027 calendar year. Compliance verification will be carried out at the first IAPP renewal survey on or after 1 January 2027.

Structure of the framework

The Net-Zero Framework is implemented as a new Chapter 4 ter of MARPOL Annex VI, sitting alongside the existing Chapter 4 (which contains the EEDI, EEXI, SEEMP and CII regulations). The new chapter comprises six numbered regulations:

Regulation 30 (Application and definitions): Applies the framework to all ships of 5,000 GT and above engaged on international voyages from 1 January 2027. Defines the key terms (attained GFI, Required GFI, DCT, Remediation Unit, Surplus Unit, IMO Net-Zero Fund).
Regulation 31 (GHG Fuel Intensity standard): Sets out the methodology for calculating the attained GFI on a well-to-wake basis using the LCA Guidelines (MEPC.376(80) and MEPC.391(82)) and prescribes the Required GFI trajectory.
Regulation 32 (Direct Compliance Threshold): Sets out the DCT trajectory tighter than the Required GFI, and the rules for earning Surplus Units.
Regulation 33 (Remediation Units): Sets out the obligation to surrender RUs for emissions in excess of the Required GFI, the price-setting mechanism, and the surrender deadlines.
Regulation 34 (IMO Net-Zero Fund): Establishes the Fund as the central repository for RU revenue and prescribes the principles for revenue allocation.
Regulation 35 (Reporting and verification): Integrates the framework with the existing IMO DCS reporting infrastructure under Regulation 27 of Annex VI.

Three new appendices are added to Annex VI:

Appendix X: GFI calculation methodology and default well-to-wake values (referencing MEPC.391(82)).
Appendix XI: Form of the Statement of Compliance under the Net-Zero Framework, replacing the previous form of the Statement of Compliance under Regulation 6.
Appendix XII: Procedures for the IMO Net-Zero Fund (financial governance, project selection, audit).

GHG Fuel Intensity (GFI) standard

Attained GFI calculation

The attained GFI is the well-to-wake GHG intensity of the fuel mix consumed by the ship in the reporting calendar year, expressed in g CO₂-equivalent per megajoule (g CO₂e/MJ) of fuel energy on a lower-heating-value basis. The formula is:

GFI_attained = Σ (m_j × LHV_j × WtW_j ) ÷ Σ (m_j × LHV_j )

where:

m_j is the mass of fuel j consumed in the reporting year, in tonnes.
LHV_j is the lower heating value of fuel j, in MJ per kg.
WtW_j is the well-to-wake GHG intensity of fuel j, in g CO₂e/MJ.
Summation is over all fuels consumed in the reporting year.

The well-to-wake intensity comprises the well-to-tank (WtT) emissions (fuel production, refining and transport), the tank-to-wake (TtW) CO₂ emissions (combustion), and the tank-to-wake CH₄ and N₂O emissions converted to CO₂-equivalent using the GWP100 metric (28 for CH₄, 273 for N₂O). The default values are taken from MEPC.391(82) Table 1 unless certified ship-specific values are available.

The GFI attained calculator implements the formula and the MEPC.391(82) default values for the principal fuel pathways: HFO, MGO, LSFO, LNG (4-stroke MS, 2-stroke SS Otto, 2-stroke Diesel), bio-MGO, bio-LNG, green and grey methanol, green and grey ammonia, and direct-air-capture e-fuels. The calculator computes the attained GFI for an arbitrary fuel mix and reports the contribution of each fuel to the weighted average.

Required GFI trajectory

The Required GFI is the maximum permissible attained GFI for each calendar year. The reduction trajectory adopted at MEPC 83 is calibrated against a 2008 well-to-wake baseline of approximately 92 g CO₂e/MJ (the IMO-published average WtW intensity of the international shipping fuel mix in 2008, dominated at the time by HFO with a small fraction of MGO):

Year	Required GFI reduction vs 2008	Required GFI (g CO₂e/MJ)
2027	1.5%	90.6
2028	4%	88.3
2029	8%	84.6
2030	17%	76.4
2031	21%	72.7
2032	24%	69.9
2033	27%	67.2
2034	28.5%	65.8
2035	30%	64.4
2040	65%	32.2

The trajectory is steepest between 2030 and 2035 (a 13-percentage-point reduction) and continues at a similar pace to 2040 (a 35-percentage-point reduction in five years). The post-2040 trajectory will be reviewed at MEPC 92 in 2031 and is currently expected to follow a linear path to net-zero by or around 2050.

Direct Compliance Threshold (DCT)

The Direct Compliance Threshold is a second, tighter limit set below the Required GFI. Ships emitting at or below the DCT earn Surplus Units; ships emitting between the DCT and the Required GFI must surrender Remediation Units only for the emissions above the Required GFI (i.e. they receive no penalty for the gap between the DCT and the Required GFI but earn no Surplus Units either). The DCT trajectory adopted at MEPC 83 is:

Year	DCT reduction vs 2008	DCT (g CO₂e/MJ)	Gap from Required GFI
2027	17%	76.4	14.2
2028	21%	72.7	15.6
2030	32%	62.6	13.8
2035	43%	52.4	12.0
2040	79%	19.3	12.9

The DCT is approximately 12 to 16 g CO₂e/MJ below the Required GFI in each year, equivalent to a 14% to 18% additional reduction. The DCT is calibrated to ensure that the price signal generated by Surplus Unit credits is meaningful enough to drive uptake of zero-emission fuels, while not being so tight as to be unachievable in the early years of implementation.

Calculation methodology

The framework uses the lifecycle GHG accounting methodology set out in MEPC.376(80) - 2024 Guidelines on Lifecycle GHG Intensity of Marine Fuels, as updated by MEPC.391(82) (2024). The methodology requires:

Default WtW values for each fuel pathway, as in MEPC.391(82) Table 1.
Certification of non-default values where the fuel supplier or shipowner claims a value better than the default. Certification follows the audit framework of the EU Renewable Energy Directive RED III for biofuels and the analogous IMO-developed framework for synthetic e-fuels. The Maritime Fuels Trust Verification scheme operated by the major classification societies provides the practical assurance pathway.
Methane slip and N₂O slip accounting: methane slip from LNG dual-fuel engines is converted to CO₂-equivalent using GWP100 = 28; N₂O slip from ammonia engines uses GWP100 = 273. The methane slip CO₂-equivalent calculator and the ammonia NOx + N₂O slip calculator implement the conversions.

The methodology explicitly excludes ship operational emissions other than fuel combustion (e.g. refrigerant leakage, paint VOC). The framework’s scope is GHG from fuels, consistent with the parallel scope of FuelEU Maritime.

Economic instrument

Remediation Units

A Remediation Unit (RU) represents one tonne of CO₂-equivalent of well-to-wake emissions in excess of the Required GFI. Ships exceeding the Required GFI must purchase and surrender RUs in proportion to the emissions excess. The RU obligation in tonnes CO₂-equivalent is:

RU obligation (tCO₂e) = (GFI_attained - GFI_required ) × Energy used (MJ) ÷ 10⁶

where Energy used is the total annual energy of the fuel mix consumed by the ship, computed as Σ (m_j × LHV_j ) × 1000 (tonne-to-kg conversion) MJ.

The GFI compliance calculator implements the end-to-end computation: from attained GFI and total annual energy, it returns the Required GFI for the chosen year, the DCT, the RU obligation in tonnes CO₂-equivalent, the equivalent Surplus Unit credit if at or below the DCT, and the USD cost at a user-set RU price.

Pricing and adjustments

The initial RU price for the 2027 implementation year is set at USD 100 per tonne CO₂-equivalent. The price is reviewed every five years by MEPC and is expected to follow a defined trajectory:

Year	RU price (USD/tCO₂e)
2027	100
2030	150
2035	250
2040	400

The price trajectory is calibrated to ensure that the marginal cost of being above the Required GFI is sufficient to drive uptake of low-carbon and zero-carbon fuels. The specific values may be adjusted by MEPC based on actual implementation experience, the evolution of low-carbon fuel costs, and the trajectory toward the 2050 net-zero target.

Surplus Units

A Surplus Unit (SU) represents one tonne of CO₂-equivalent of well-to-wake emissions below the Direct Compliance Threshold. Ships emitting at or below the DCT earn SUs in proportion to the gap between attained GFI and DCT. The SU credit is:

SU credit (tCO₂e) = (GFI_DCT - GFI_attained ) × Energy used (MJ) ÷ 10⁶

(applied only when GFI_attained ≤ GFI_DCT )

SUs may be banked for future use (with a five-year shelf life from the year of issuance) or sold to other ships in deficit. The IMO Secretariat operates a central RU/SU registry implemented as an extension of the existing IMO DCS database. Trade between ship operators is facilitated through accredited carbon-market platforms.

Banking and trading

The banking and trading rules are designed to:

Smooth annual variation in compliance: a ship that has a particularly low-emission year (e.g. due to a successful biofuel campaign) may bank SUs for use in a subsequent year when conditions are less favourable.
Enable inter-ship trading within a fleet operator: a fleet with some ships above the DCT and some below may net out the obligations across the fleet.
Support cross-operator trading: an over-compliant operator may sell SUs to an under-compliant operator, generating a market for over-compliance.

The trading rules explicitly exclude trading between IMO RU/SU and other carbon-market instruments (EU ETS allowances, voluntary carbon credits) to prevent double-counting and to preserve the integrity of the IMO framework. The interaction with the EU ETS Maritime regime is addressed through a separate double-counting avoidance mechanism (discussed below).

IMO Net-Zero Fund

The IMO Net-Zero Fund is established by Regulation 34 of the new Chapter 4 ter as the central repository for RU revenue. The Fund is governed by a Board of Trustees comprising representatives of the IMO Member States (with weighted representation reflecting the principle of common but differentiated responsibilities) and operated by the IMO Secretariat under audit by independent international auditors.

Revenue collection

All revenue from RU surrender flows into the Fund. Estimated annual revenue at the 2027 implementation, based on the projected fleet attained GFI and the USD 100 per tonne RU price, is in the range of USD 6 billion to USD 12 billion per year. The wide range reflects uncertainty about the speed of fleet decarbonisation and the consequent fraction of ships above the Required GFI.

Allocation principles

Regulation 34 sets out three allocation principles:

In-sector use: the great majority of the revenue (initially proposed at 70% to 80%, with the exact figure to be set at MEPC 84) is used for shipping decarbonisation projects, including bunkering infrastructure for low-carbon fuels in developing-country ports, R&D for zero-emission ship technologies, and crew training under the STCW Convention.
Climate finance use: a defined share (initially proposed at 20% to 30%) is transferred to the UNFCCC climate finance system, principally via the Green Climate Fund.
Just transition fund: a smaller share (initially proposed at 5% to 10%) is reserved for direct support to seafarer training, port communities affected by the transition, and the social impact of fuel and technology change.

Just transition mechanism

The just transition mechanism is one of the principal compromises secured at MEPC 83. The mechanism is designed to address three concerns:

Disproportionately negative impacts on developing states: SIDS, LDCs and developing economies reliant on long-distance maritime trade may face higher costs from the framework. The Fund provides preferential access for projects in these states.
Seafarer training and employment: the workforce of approximately 1.9 million seafarers worldwide must be retrained for new fuel types (ammonia, hydrogen, methanol) and new ship technologies (battery propulsion, fuel cells). The Fund supports the retraining infrastructure.
Port community transition: ports historically reliant on bunker-fuel handling must adapt to new fuel infrastructure (bunkering terminals, storage, safety systems for ammonia and hydrogen). The Fund supports infrastructure investment in transitioning ports.

Implementation timeline

MEPC 84 formal adoption

MEPC 84 is scheduled for 6 to 10 October 2025 in London. The principal substantive item on the agenda is the formal adoption of the Net-Zero Framework as approved at MEPC 83. Adoption proceeds under the MARPOL tacit acceptance procedure of Article 16: amendments are adopted by a two-thirds majority of Parties present and voting and enter into force on a date set by MEPC, normally 16 months after adoption, unless one-third of Parties (or Parties representing 50% of world tonnage) object before that date.

Phase-in 2027 to 2030

The framework applies to ships of 5,000 GT and above engaged on international voyages from 1 January 2027. The phase-in trajectory is:

2027: First reporting year. Required GFI 1.5% below 2008 baseline. RU price USD 100/tonne CO₂e. Surrender obligations apply to the 2027 calendar year, with surrender due 30 June 2028.
2028: Required GFI 4% below 2008. Same RU price.
2029: Required GFI 8% below 2008. Same RU price (next price review 2030).
2030: Required GFI 17% below 2008. RU price rises to USD 150/tonne (subject to MEPC 90 review).

The phase-in is deliberately gradual to allow the global fleet, fuel suppliers and port infrastructure to adjust to the new regime. The 2030 step-change in Required GFI (from 8% to 17%) is the most challenging implementation milestone, requiring approximately 10% to 15% of global fleet energy to come from low-carbon fuels by that date. This is broadly consistent with the 2023 Revised Strategy’s 5% to 10% zero/near-zero fuel uptake target.

Reporting and verification

Reporting under the Net-Zero Framework uses the existing IMO DCS infrastructure. Ships report annually to their flag administration the data required by the existing Regulation 27, plus the additional data points required for the GFI calculation (fuel pathway certification, lower heating value if non-standard, methane slip measurement if available). The flag administration validates the data and forwards it to the IMO Secretariat. The IMO Secretariat computes the attained GFI, compares against the Required GFI and DCT, and notifies the ship of its RU obligation or SU credit. The ship surrenders RUs (or banks SUs) by the surrender deadline of 30 June of the year following the reporting year.

The Statement of Compliance under the Net-Zero Framework (the form prescribed in Appendix XI) is issued by the flag administration following confirmation that the RU surrender (or SU banking) is complete. The Statement of Compliance is required for the IAPP renewal survey and, in practice, for charter-party purposes.

Compliance verification

Verification by port state control is integrated with the existing Annex VI inspection regime. Inspectors verify that the ship’s Statement of Compliance is current and that the on-board records of fuel consumption (in the Bunker Delivery Note book and the on-board fuel-management software) reconcile with the data reported to the flag administration. Discrepancies trigger detailed inspection and may result in detention.

Compliance pathways

Drop-in low-carbon fuels

The cheapest compliance pathway in the early years of the framework (2027 to 2030) is the use of drop-in low-carbon fuels that can be combusted in existing ship engines without modification. The principal options are:

Bio-MGO and bio-LNG: certified-sustainable biofuels with WtW intensity in the range of 5 to 25 g CO₂e/MJ, depending on feedstock and pathway. A 100% bio-MGO ship would have an attained GFI well below the 2030 Required GFI; a 30% bio-MGO blend (B30) with 70% conventional MGO would have an attained GFI of approximately 65 g CO₂e/MJ, just below the 2030 Required GFI.
B-grade biodiesel blends (B20, B30, B50, B100): widely available in the major bunker hubs (Rotterdam, Singapore, Houston) and increasingly in secondary hubs (Dubai, Long Beach, Hong Kong) by 2025. Compatibility with existing engines is broadly proven for blends up to B30.

The premium for drop-in biofuels over conventional fuel was approximately USD 200 to USD 400 per tonne in 2025; the premium is expected to fall as supply scales up but is unlikely to fall below approximately USD 100 per tonne by 2030.

Zero-carbon fuels

The principal long-term compliance pathway is the use of zero-carbon fuels, which require new ship engines designed for the specific fuel chemistry. The principal options are:

Green ammonia: produced from hydrogen made by electrolysis using renewable electricity, with WtW intensity of approximately 6 to 12 g CO₂e/MJ. Engine technology is at the demonstration stage in 2025; commercial deployment expected from 2027 to 2028.
Green methanol: produced from green hydrogen plus CO₂ (either direct air capture or biogenic CO₂), with WtW intensity of approximately 5 to 10 g CO₂e/MJ. Engine technology mature (Maersk container ships from 2024); supply scaling underway.
Hydrogen: WtW intensity of approximately 0 to 5 g CO₂e/MJ depending on production pathway. Engine technology and shipboard storage immature; commercial deployment unlikely before 2030.
Onboard CO₂ capture (OCC): captures CO₂ from exhaust gas for shore offloading or sequestration; reduces the TtW component of WtW intensity by 50% to 80%. Demonstration stage in 2025.

Operational efficiency

Operational efficiency measures continue to play a role under the framework, principally as a marginal contribution to overall compliance. The SFOC-to-CII converter shows the relationship between engine efficiency and overall ship carbon intensity; a 1 g/kWh improvement in SFOC translates into approximately 0.5% reduction in attained GFI. Other operational measures include slow steaming, trim optimisation, weather routing and hull cleaning. However, operational measures are unlikely to deliver more than 10% to 15% reduction in attained GFI on their own; the framework’s reduction trajectory after 2030 cannot be met by operational measures alone.

Interaction with regional regimes

EU ETS Maritime

The EU Emissions Trading System Maritime (EU ETS Maritime), in force since 1 January 2024, requires ships of 5,000 GT and above to surrender EU Allowances (EUAs) for a percentage of their CO₂ emissions on intra-EU voyages and 50% of CO₂ on voyages between an EU port and a non-EU port. The phase-in is 40% in 2025, 70% in 2026 and 100% in 2027 onwards. Methane and N₂O are added from 1 January 2026.

The EU ETS Maritime and the IMO Net-Zero Framework operate on different bases (cap-and-trade total emissions vs WtW fuel intensity) and at different scopes (intra-EU and 50% of EU-international vs global). The interaction between the two regimes is governed by the double-counting avoidance mechanism under negotiation between the IMO and the European Commission. The working assumption is that:

EUA surrender under EU ETS Maritime does NOT discharge the corresponding obligation under the IMO Net-Zero Framework.
However, the actual climate impact accounted in the IMO framework is reduced by the proportion of the emissions covered by EU ETS surrender.
Net result: a ship operating in EU waters faces both EU ETS surrender and IMO RU surrender on different bases (per-tonne CO₂ vs g CO₂e/MJ over the Required GFI), but the practical financial impact is mitigated by the proportional reduction.

The European Commission has signalled support for a longer-term convergence between the two regimes, with a possible adjustment to EU ETS Maritime to align with the IMO framework’s GFI basis and allowance recognition. Convergence is unlikely before 2030 given the different policy logic of the two regimes.

FuelEU Maritime

The FuelEU Maritime Regulation (EU) 2023/1805, in force since 1 January 2025, imposes a separate well-to-wake GHG intensity requirement on the energy used on board ships calling at EU ports. The scope is 100% of energy on intra-EU voyages, 50% on voyages between an EU port and a non-EU port, and 100% of energy used while at berth in EU ports. The reduction factors are 2% (2025), 6% (2030), 14.5% (2035), 31% (2040), 62% (2045) and 80% (2050).

The IMO Net-Zero Framework is more stringent than FuelEU Maritime in the period 2030 to 2040 (17% vs 6% in 2030, 65% vs 31% in 2040), but FuelEU Maritime catches up in the 2040s and exceeds the IMO trajectory by 2050 (80% vs the IMO net-zero target in 2050). The two regimes use the same WtW methodology (the IMO LCA Guidelines and the FuelEU Annex II default values are deliberately aligned), but the compliance mechanism differs:

FuelEU Maritime: penalty per tonne CO₂e in excess of the Required intensity; penalty rises in proportion to the overage; pooling allowed within an operator’s fleet.
IMO Net-Zero Framework: RU surrender at IMO-set price; SU credit for under-compliance; trading allowed across operators.

A ship operating on intra-EU routes faces both regimes simultaneously, with the FuelEU penalty added to the IMO RU surrender for the corresponding emissions. The combined cost in 2030 for a ship 10 g CO₂e/MJ above both Required values is approximately USD 1 million per year (USD 500,000 IMO + USD 500,000 FuelEU equivalent). The MARPOL FuelEU penalty calculator implements the FuelEU side.

CARB at-berth and other regional rules

The California At-Berth Rule and other regional rules (UK ETS, China DCS, Norway NOx Fund) operate independently of the IMO framework. The Net-Zero Framework does not displace or pre-empt these regimes; ships subject to multiple regimes must comply with each separately. The compliance burden has driven a shift in fleet management toward integrated regulatory accounting, with many large operators now operating single-source compliance teams covering all regimes.

Compliance economics

The compliance economics of the Net-Zero Framework can be summarised through three scenarios for a typical 50,000 DWT bulk carrier consuming approximately 10,000 tonnes of fuel per year:

Scenario 1: business-as-usual HFO-only ship in 2027

Attained GFI: 90.5 g CO₂e/MJ (HFO default)
Required GFI 2027: 90.6 g CO₂e/MJ
RU obligation: approximately 0 (ship just below Required GFI)
Cost: 0 (compliant by margin)

A pure HFO ship is broadly compliant with the 2027 Required GFI without any change in operations. By 2030, the same ship would face a significant RU obligation:

Attained GFI 2030: 90.5 g CO₂e/MJ (unchanged HFO use)
Required GFI 2030: 76.4 g CO₂e/MJ
Excess: 14.1 g CO₂e/MJ
Energy used: 10,000 t × 40 MJ/kg = 400,000,000 MJ = 400 TJ
RU obligation: 14.1 × 400,000 ÷ 1000 = 5,640 tonnes CO₂e
RU cost at USD 150/tonne: USD 846,000 per year

By 2035 the same ship would face approximately USD 2.5 million per year in RU surrender; by 2040, approximately USD 9 million per year.

Scenario 2: ship operating B30 biofuel blend in 2030

Attained GFI: 70% × 90.5 + 30% × 5 = 64.9 g CO₂e/MJ
Required GFI 2030: 76.4 g CO₂e/MJ
Excess: -11.5 g CO₂e/MJ (below Required GFI)
Surplus over DCT (62.6): 0 (still above DCT)
RU obligation: 0
SU credit: 0
Cost: only the biofuel premium (approximately USD 200/tonne for B30 blend × 3,000 tonnes biofuel = USD 600,000)

Scenario 3: ship operating green ammonia in 2030

Attained GFI: 9 g CO₂e/MJ (green ammonia default)
Required GFI 2030: 76.4 g CO₂e/MJ
DCT 2030: 62.6 g CO₂e/MJ
Surplus over DCT: 53.6 g CO₂e/MJ
SU credit: 53.6 × 400,000 ÷ 1000 = 21,440 tonnes CO₂e
SU value at USD 150/tonne: USD 3.2 million per year credit, partially offsetting the green ammonia premium (approximately USD 800/tonne over HFO equivalent, total premium approximately USD 8 million per year)

The economics demonstrate that:

2027 to 2029: business-as-usual ships are broadly compliant; biofuel investment is not yet economically necessary.
2030 onwards: business-as-usual ships face significant and growing RU costs; biofuel blends become economically attractive; zero-carbon fuels become competitive on a SU-credit-adjusted basis.
2035 onwards: the RU cost on business-as-usual operation becomes prohibitive (>USD 2 million per year); zero-carbon fuels become the principal compliance pathway.
2040 onwards: business-as-usual ships are essentially uncommercial; the fleet must be operating principally on zero-carbon fuels.

Critical assessment

Is the framework ambitious enough?

The Required GFI trajectory of 17% by 2030, 30% by 2035 and 65% by 2040 is broadly aligned with the 2023 Revised Strategy’s indicative checkpoints of 20% to 30% by 2030 and 70% to 80% by 2040. The lower end of the Strategy ambition is the operative target of the framework; the upper end (the “striving for” levels) is not formally committed.

The Pacific Islands Forum, the Marshall Islands and a number of NGOs (Clean Shipping Coalition, Transport and Environment, Pacific Environment) have characterised the framework as “a significant step but not Paris-aligned”. The principal criticism is that the trajectory does not meet the IPCC 1.5°C-compatible reduction of approximately 37% by 2030 and approximately 96% by 2040. The European Commission’s assessment is that the framework is “ambitious and achievable” and that the 5-year review mechanism allows for tightening if the Paris Agreement temperature trajectory requires it.

Is the price right?

The initial RU price of USD 100/tonne CO₂e is generally accepted as too low to drive the necessary fuel-switching at scale. The DNV Maritime Forecast 2025 projects that the RU price would need to reach approximately USD 250/tonne by 2035 to drive the required fuel-switching pace. The 2030 price of USD 150/tonne is on the low end of the range required for green ammonia and green methanol to be cost-competitive without further subsidy.

The IMO has signalled openness to upward adjustments at the 2030 review, but the political dynamic (oil-exporting states opposed to higher prices, developing states concerned about transport-cost impacts) makes substantial increases politically difficult. The principal mechanism through which the price will adjust is the periodic 5-year review, with the next major review at MEPC 90 in 2030.

Will compliance actually deliver net-zero?

The framework’s reduction trajectory through 2040 is achievable on a technically and economically realistic basis if zero-carbon fuel supply scales as projected. The principal binding constraint, identified in the IEA World Energy Outlook 2024, is global renewable electricity generation: zero-carbon fuels (green ammonia, green methanol, hydrogen) require very large quantities of renewable electricity (approximately 50 to 70 MWh per tonne of green ammonia at electrolyser efficiency of 70%). Meeting the framework’s 2040 trajectory requires approximately 100 GW of new renewable electricity generation dedicated to maritime fuels by 2040, comparable in scale to the current global wind power capacity.

The 2040-to-2050 trajectory to net-zero is much more uncertain. The principal pathways are: very high zero-carbon fuel adoption (essentially all fuel by 2050); onboard carbon capture for the residual fraction; fleet renewal toward battery and hydrogen propulsion for short-sea routes; and offsets for the residual emissions from long-distance fossil fuel use. The mix of these pathways, and the resulting cost, is the principal uncertainty in the framework’s long-term trajectory.

Industry and stakeholder positions

The principal industry positions on the framework are:

International Chamber of Shipping (ICS): supportive of the framework as the global regulatory architecture that prevents fragmentation of regulation.
BIMCO: supportive, with focus on the practical implementation of the RU surrender process and the development of standard charter-party clauses.
INTERTANKO: supportive of the framework, expressed concern about the cost trajectory for tanker shipping.
INTERCARGO: supportive, with focus on the impact on bulk carriers serving developing-country trades.
World Shipping Council (WSC): strongly supportive, with continuous engagement on implementing rules.
Cruise Lines International Association (CLIA): supportive, with focus on the application to cruise vessels.
Clean Shipping Coalition (NGO observer): supportive of the direction but critical of the trajectory and the price level.
Pacific Environment (NGO): critical of the framework as insufficient for 1.5°C alignment.

Future outlook

The principal regulatory developments expected through 2030 are:

MEPC 84 (October 2025): formal adoption of the Net-Zero Framework with finalised reduction trajectory and economic-instrument design.
MEPC 85 (mid-2026): adoption of the implementing guidelines for fuel certification, RU/SU registry operation and the IMO Net-Zero Fund governance.
MEPC 86 (late 2026 / early 2027): review of the CII reduction factors beyond 2026; coordination with the entry into force of the Net-Zero Framework.
MEPC 87 to 88 (2027 to 2028): first reporting cycles under the Net-Zero Framework; first RU surrender by ships in deficit (June 2028).
MEPC 90 (2030): first 5-year review of the Net-Zero Framework against the 2030 indicative checkpoint and the levels of ambition; possible adjustment of the RU price and the reduction trajectory.
MEPC 92 (2031): comprehensive 5-year review of the framework as a whole; review of the post-2040 trajectory.
MEPC 96 to 100 (2034 to 2036): mid-decade review against the 2035 reduction target.
MEPC 110 (2041): review against the 2040 indicative checkpoint and adjustment of the post-2040 trajectory.

By 2030 the IMO is expected to have a clearer picture of the trajectory toward the 2040 indicative checkpoint and the 2050 net-zero target. The framework will itself be subject to a comprehensive five-year review at MEPC 92 in 2031 in light of the actual implementation experience and the trajectory of zero-carbon fuel cost reductions. Significant uncertainties remain about the supply of zero-carbon fuels, the cost trajectory of the framework, the political sustainability of the international consensus that produced the 2025 approval, and the interaction with regional regimes that may tighten faster than the IMO global framework.

References

IMO MEPC. Net-Zero Framework: Approval Document. MEPC 83/INF.3, April 2025.
IMO MEPC. Resolution MEPC.377(80) - 2023 IMO Strategy on Reduction of GHG Emissions from Ships. IMO, 7 July 2023.
IMO MEPC. Resolution MEPC.376(80) - 2024 Guidelines on Lifecycle GHG Intensity of Marine Fuels. IMO, 7 July 2023.
IMO MEPC. Resolution MEPC.391(82) - 2024 Update to LCA Guidelines (Default Pathways). IMO, October 2024.
IMO MEPC. Resolution MEPC.328(76) - Amendments to MARPOL Annex VI (EEXI, CII, SEEMP Part III). IMO, 17 June 2021.
IMO MEPC. Resolution MEPC.336(76) - 2021 Guidelines on the Operational Carbon Intensity Indicators. IMO, 17 June 2021.
IMO. Fourth IMO GHG Study 2020. IMO, London, 2020.
International Energy Agency. World Energy Outlook 2024. OECD/IEA, Paris, 2024.
DNV. Maritime Forecast to 2050. DNV, Oslo, 2025 edition.
UMAS. Net-Zero Framework: Compliance Pathway Analysis. UCL Energy Institute, London, 2025.
CE Delft. Marine Bunker Fuel Consumption: Outlook to 2050. CE Delft, Delft, 2024.
Mission Possible Partnership. Industry Transition Strategy: Shipping. Energy Transitions Commission, London, 2022.
World Bank. Charting a Course for Decarbonising Maritime Transport. World Bank, Washington, 2024.
Global Maritime Forum. Getting to Zero Coalition Annual Report 2025. Copenhagen, 2025.
European Commission. Communication on the IMO Net-Zero Framework: EU Position and Implementing Implications. COM(2025) 187 final, May 2025.

External links

IMO Net-Zero Framework page - official IMO landing page
MEPC 83 outcome statement - official MEPC outcome
European Commission Maritime Climate Page - EU implementing measures
Getting to Zero Coalition - industry-NGO coalition
UMAS - University Maritime Advisory Services research portal