IMO Net Zero Shipping Framework: Extraordinary IMO Session Adjourned; Work Continues
JEANNE M. GRASSO Partner
HOLLI B. PACKER Associate
VANESSA C. DIDOMENICO Associate
From October 14 to 17, 2025, the International Maritime Organization’ s(“ IMO”) Marine Environment Protection Committee(“ MEPC”) held an extraordinary session to consider the adoption of amendments to MARPOL Annex VI, including the proposed IMO Net Zero Framework(“ NZF”). The session concluded with a decision to adjourn and reconvene in 12 months, allowing additional time to consider revisions to the NZF and for Member States to build consensus.
In the interim, technical and implementation details are being developed and refined through IMO bodies, notably the Working Group on the Reduction of Greenhouse Gas Emissions from Ships(“ Working Group”), which met from October 20 to 24, 2025, to advance NZF guidelines.
Meanwhile, the United States continues to reaffirm its strong opposition to the NZF, while outlining potential retaliatory measures. European Union(“ EU”) decarbonization regulations remain in force, and regional frameworks continue to evolve in the absence of unified IMO action. This regulatory uncertainty highlights the importance of proactive engagement with policymakers and strategic planning across various potential compliance scenarios.
The IMO Net-Zero Framework: Scope and Ambition The NZF is the centerpiece of the IMO’ s mid-term greenhouse gas(“ GHG”) reduction measures, intended to be formalized as a new Chapter 5 of MARPOL Annex VI. Its primary objective is to achieve net-zero GHG emissions from international shipping by 2050, in line with the 2023 IMO Strategy on GHG Emissions. The NZF applies to all vessels of 5,000 gross tons and above on international voyages, with limited exceptions for vessels operating solely within national waters, non-mechanically propelled vessels, and certain offshore platforms. The draft regulations are built on two main pillars:
1. Technical Element: A GHG fuel standard that mandates progressive reductions in the GHG fuel intensity(“ GFI”) of marine fuels, measured from production to use or on a well-to-wake(“ WtW”) basis.
2. Economic Element: A global GHG emissions pricing mechanism, requiring vessels that do not meet the GFI targets to purchase“ Remedial Units”(“ RUs”), with revenues paid into the IMO Net-Zero Fund by the shipowner.
This dual approach is designed, in theory, to both drive the uptake of zero and near-zero(“ ZNZ”) GHG fuels and technologies and create a level playing field for the global fleet.
Key Regulatory Mechanisms and Compliance Pathways As currently drafted, each vessel would need to calculate its annual GFI of all fuels used on a WtW basis. The target GFI is structured into two tiers that vessels would need to meet: a Base Target( Tier 2) and a more stringent Direct Compliance Target( Tier 1). Both targets get progressively more stringent annually.
At the close of each reporting year, vessels would need to assess their GFI compliance. Vessels that meet or exceed the Direct Compliance Target would earn Surplus Units(“ SUs”), which may be banked for up to two years, traded with other vessels, or voluntarily canceled as a climate mitigation measure. Conversely, vessels that fall short would need to offset their deficit by acquiring SUs from other vessels( pooled compliance), using previously banked SUs, or purchasing RUs from the IMO at benchmark prices. For the 2028 – 2030 period, RU prices were to be set at $ 100 per ton of CO₂eq( CO 2 equivalent) for Tier 1 and $ 380 per ton for Tier 2.
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