IMO Net-Zero Shipping Framework: A Crossroads for Global Shipping Regulations( continued from page 2)
Reporting Requirements. Vessels would have to report their annual GFI and compliance approach to their flag Administration or Recognized Organization(“ RO”) within three months of the end of the reporting period( the start of the first reporting period would be January 1, 2028). Further details regarding data verification and the designated party responsible for submitting information to the IMO GFI Registry will likely be outlined in the IMO’ s forthcoming implementation guidance. If the Framework is adopted, each vessel is expected to have an account in the Registry by October 2027.
Certification Requirements. The GHG intensity of fuels would have to be certified by Sustainable Fuels Certification Schemes(“ SFCS”), approved by IMO, with relevant sustainability metrics documented on Fuel Lifecycle Labels. IMO is expected to publish a list of recognized SFCSs by March 2027. The IMO is developing comprehensive implementation guidelines, which will include Life Cycle Assessment(“ LCA”) methodology to ensure that upstream emissions, land and water use, social impacts, and food security are factored into fuel assessments. Final implementation guidelines are expected by May 2026 and will be critical for determining the compliance value of biofuels, liquefied natural gas(“ LNG”), and emerging ZNZ fuels.
The IMO Net-Zero Fund: Revenue and Disbursement The fees collected from under-compliant vessels would go into the IMO Net-Zero Fund, paid directly by shipowners, which would be used for:
• Rewards for ZNZ Fuel Use. Vessels using fuels or technologies with GFI below required standards would be eligible for financial rewards. The methodology and quantum of these rewards are to be finalized by March 2027 and reviewed every five years.
• Supporting a Just and Equitable Transition. A significant portion of the IMO Net-Zero Fund would be allocated to support decarbonization efforts in developing countries, particularly least-developed countries and small island developing states, including training, research, technology transfer, and investments in green fuel production and bunkering infrastructure.
United States Position on the IMO Net-Zero Framework The United States, under the Trump administration, has taken a firm stance against the Framework, characterizing it as a global carbon tax that would disproportionately burden American interests.
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