Maritime decarbonisation update

Maritime decarbonisation regulations have been coming into force with regularity over the past couple of years as the International Maritime Organisation (IMO) and the EU have progressed towards their carbon net-zero ambitions.

These regulations arise from different regulatory regimes and are not (or at least not yet) being introduced in tandem, such that it is all too easy to become lost in the weeds of which regulation applies, to what and to whom.  
In this article, we comment on the IMO Net-Zero Framework discussed at the recent meeting of the Marine Environment Protection Committee (MEPC 83) and the measures which are due to be adopted at the next MEPC meeting in October 2025.  

The IMO Net-Zero Framework

The IMO Net-Zero Framework is intended to be included as a new Chapter 5 of Annex VI (Prevention of air pollution from ships) to the International Convention for the Prevention of Pollution from Ships (MARPOL).  

The draft regulations require ships over 5,000 gross tonnage to comply with:

1. A global fuel standard reducing over time the gas fuel intensity (GFI), being the emitted greenhouse gas per unit of energy used; and

2. A global economic measure setting thresholds for GFI emissions and requiring remedial units to be acquired in respect of any deficit emissions.

The GHG Fuel Intensity targets will provide a Base Target and a Direct Compliance Target including a mechanism to earn ‘surplus units’ and allow any deficit balance to be managed by transferring surplus units, banking surplus units and acquiring remedial units through contribution to the IMO Net-Zero Fund.

The timetable for these regulations to come into force is presently set for 2027, assuming the amendments are adopted in October 2025.

Thematically, the IMO Net-Zero Framework covers territory which is familiar to those who have engaged with shipping into the EU since January 2024, particularly the EU Emission Trading Scheme and FuelEU, since it introduces a cost for the creation of certain emissions and a requirement to lower emissions.  

There are crucial differences to the anticipated operation of the IMO proposals and the EU regulations in relation to enforcement structures, pricing models, data collation and submission, penalties and incentives.  

Once adopted, the IMO Net-Zero Framework will not replace the EU regulations and it is likely that at least at the outset, regulated parties will need to comply with both the EU and IMO measures.

Shipping contracts, including ship management agreements, time and voyage charterparties and contracts of affreightment, will need to be further reviewed in light of the IMO Net-Zero Framework to clearly allocate responsibilities and risks in relation to compliance in advance of it coming into force in 2027.