The International Maritime Organization (IMO) has taken a significant step toward decarbonizing global shipping with the development of the Net-Zero Framework (NZF). Approved in April 2025 during the 83rd session of the Marine Environment Protection Committee (MEPC 83), the NZF aims to reduce greenhouse gas (GHG) emissions from international shipping, aligning with the IMO’s 2023 Strategy for Reduction of GHG Emissions from Ships. This framework is poised to make shipping the first major industry with legally binding emissions reductions.
The NZF introduces two primary mechanisms to achieve its decarbonization goals:
- Global Fuel Standard: This standard sets annual GHG fuel intensity reduction targets for ships over 5,000 gross tonnages, which account for approximately 85% of international shipping emissions. The targets are designed to progressively decrease through 2035, with future targets to be set every five years.
- Emissions Pricing Mechanism: The framework establishes a two-tier carbon pricing system:
Tier 1: Emissions between the base target and compliance target are priced at $100 per tonne of CO₂ equivalent.
Tier 2: Emissions exceeding the compliance target are priced at $380 per tonne of CO₂ equivalent.
This pricing is calculated on a well-to-wake basis, accounting for the full lifecycle emissions of maritime fuel.
The NZF is set to enter into force in 2027, with full implementation expected by 2028. However, recent developments have introduced uncertainties. In October 2025, following intense lobbying, including threats of sanctions and trade penalties, the United States, along with allies like Saudi Arabia and Russia, succeeded in postponing the final adoption of the NZF by one year. The decision was made during an extraordinary session of the MEPC, with 57 countries supporting the delay, 49 opposing, and 21 abstaining.
This delay has sparked criticism from climate-vulnerable nations and environmental groups, who argue that it undermines urgent climate action and prolongs the shipping industry’s reliance on fossil fuels. The postponement also risks derailing discussions ahead of the upcoming COP30 summit in Brazil.
Despite the setback, the IMO’s commitment to the NZF reflects a growing recognition of the shipping sector’s role in global emissions. Industry leaders, environmental organizations, and member states continue to advocate for swift implementation, emphasizing the need for a unified global approach to maritime decarbonization.
Looking ahead, the IMO plans to resume discussions on the NZF in 2026, aiming to finalize the framework and address the concerns raised during the recent session. The outcome of these negotiations will be crucial in determining the trajectory of the shipping industry’s transition to net-zero emissions by 2050.
In conclusion, while the IMO’s Net-Zero Framework represents a pioneering effort in maritime decarbonization, its success hinges on overcoming geopolitical challenges and ensuring global cooperation. The coming year will be pivotal in shaping the future of sustainable shipping.
Marex Media