IMO Net-Zero Shipping Framework: A Crossroads for Global Shipping Regulations
JEANNE M. GRASSO Partner
HOLLI B. PACKER Associate
Introduction: A New Era for Maritime Decarbonization The International Maritime Organization’ s(“ IMO”) Marine Environment Protection Committee approved a sweeping package of draft regulations known as the“ IMO Net-Zero Shipping Framework”( the“ Framework”) in April 2025. This Framework will be voted on in October 2025 and, if adopted, will enter into force by March 2027. It marks an ambitious and comprehensive global effort to align the maritime sector with international climate goals. However, the Framework has also sparked significant debate among IMO member states, most notably the United States, which has voiced strong opposition to the proposed measures. This article provides an overview of the proposed regulations and broader industry implications, while also highlighting the United States’ position and the Framework’ s potential impact on the future of maritime decarbonization.
The IMO Net-Zero Framework: Scope and Ambition The Framework 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 Framework 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 If adopted, 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— a Base Target( Tier 2) and a more stringent Direct Compliance Target( Tier 1)— that vessels would need to meet. 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 would be set at $ 100 per ton of CO₂eq( CO2 equivalent) for Tier 1 and $ 380 per ton for Tier 2.
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