Publications
July 2025
IMO Net-Zero Framework: opportunities for ambition
Background: The IMO Net-Zero Framework
The ‘IMO Net-Zero Framework’ was approved at the 83rd meeting of the Marine Environment Protection Committee (MEPC 83) in April 2025. It is intended to become a legally binding framework to reduce GHG emissions from ships globally. The framework combines technical and economic elements under a ‘two-tiered global fuel standard (GFS)’. It sets binding emissions intensity reduction targets for ships, requiring penalty payments for those who fail to meet them.
Although it represents a significant achievement, the IMO Net-Zero Framework in its current form does not incentivise the ambitious emissions reductions needed to meet the commitments of the 2023 IMO GHG Strategy (the 2023 Strategy), nor raise the funds necessary to ensure a just and equitable transition, amongst other shortcomings.
The opportunities included here do not constitute an exhaustive list but are only those discussed in this briefing.
Key areas for further ambition
There are still several opportunities for high ambition action to influence the further development of the IMO Net-Zero Framework in a manner that prioritises ambitious emissions reductions and a just and equitable transition.
1. GHG fuel intensity reduction factors:
The Net-Zero Framework requires ships to keep their GHG Fuel Intensity (GFI) under increasingly stringent annual targets. However, the current GFI reduction factors, set until 2035, do not effectively incentivise ships to reduce their emissions in line with the IMO 2023 Strategy’s targets. Stronger targets would better incentivise ships to transition to zero and near-zero fuels and technology (ZNZs).
2. Generation and distribution of revenue:
The Framework is set to generate $10-15bn per year in revenues, far less than the annual $40-60bn that could have been raised under a flat rate universal levy, or what is needed to both ensure a just and equitable transition and develop ZNZs. Setting a higher price on penalties for emissions when the next set of figures will be determined by January 2028, alongside more stringent GFI reduction factors, would generate more ambitious revenues.
3. Regulations and guidelines on ZNZs:
To ensure the early uptake of ZNZ technologies, fuels and/or energy sources, the ZNZ reward guidelines should provide clear regulatory certainty and confidence to investors, producers and shipowners.
The Guidelines for calculating fuels’ lifecycle GHG emissions (also known as the LCA Guidelines), set to be finalised in 2026, currently have no safeguards against biofuels. The guidelines should include indirect impacts on land use change (ILUC) to avoid emissions ensure stronger support for the uptake of truly sustainable solutions.
4. Vessel size:
The Framework only applies to ships over 5,000 GT, but vessels between 400 - 5,000 GT are responsible for a significant proportion of shipping emissions. The periodic review poses an opportunity to extend the Framework’s scope to smaller vessels and better incentivise the maritime transition.
What are the next steps for States?
Governments have a unique opportunity to strengthen the Framework before and after it enters into force in 2027, by developing a robust and strong set of guidelines on these critical policy details.
Although the measures have been approved, the opportunity for ambition is far from over. Now more than ever, States must champion greater ambition while most importantly amplifying the voices of those most impacted by climate change, ensuring no one is left behind.
Opportunities for increasing ambition in the IMO Net-Zero Framework (NZF) |
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| Year | Opportunity | Ambitious outcome |
| 2026 | Guidelines to be adopted for: | |
| • Lifecycle analysis (LCA) of marine fuels’ GHG intensity | LCA must account for emissions from indirect land use change (ILUC) to safeguard against biofuels. | |
| • Zero- and near-zero (ZNZ) technologies, fuels and energy sources | Guidelines should create regulatory certainty for investors, producers and shipowners to facilitate investment in the lowest emission solutions. | |
| • GHG Fuel Intensity (GFI) target compliance reporting and calculation methodology for attained annual GFI | GFI calculation methodologies and compliance reporting should be stringent to ensure that all emissions are properly being monitored and accounted for. | |
| 2027 | Set methodology for calculating ZNZ reward values | The reward price should be set to adequately incentivise ZNZ uptake, but specifications should ensure that revenues are proportionately distributed between ZNZ rewards and measures to ensure the maritime energy transition is just and equitable. |
| 2028 | Set methodology for calculating penalties for ships exceeding GFI thresholds from 2031 | Penalties, or remedial units (RUs), should be high to incentivise the transition from polluting fuels to ZNZs, and to increase Net-Zero Fund revenues. |
| Net-Zero Fund governing provisions to be decided | Revenues should be distributed on the basis of the needs of developing countries, particularly the most climate vulnerable countries, to drive a just and equitable transition and prevent revenues disproportionately benefiting already wealthy countries and companies. | |
| 2032 | First five-yearly periodic review for: | |
| • GFI reduction factors (for 2036 – 2040) | GFI reduction compliance targets should be high to maximise emissions penalised and strengthen incentives to transition to ZNZs. | |
| • GFI thresholds for ZNZ fuels and technologies | ZNZ GFI thresholds should be low to ensure only the lowest-emission technologies receive rewards, and that unsustainable alternative fuels do not. | |
| • Possible extension of regulations to small vessels | The NZF should be applied to ships above 400 GT, not just above 5,000 GT, to penalise all emissions. | |