The International Maritime Organization (IMO) is developing a global regulatory framework intended to reduce greenhouse gas emissions from international shipping in line with the 2023 IMO GHG Strategy, which aims to achieve net-zero emissions from international shipping by or around 2050.

At the 83rd session of the Marine Environment Protection Committee (MEPC 83), member states advanced discussions on mid-term measures designed to drive this transition. The proposed regulatory package forms part of the evolving IMO Net-Zero Framework (NZF) and would be introduced through a new Chapter 5 of MARPOL Annex VI.

The framework has not yet been formally adopted. Draft amendments were approved for further consideration, and adoption is expected to be discussed at a future MEPC session. If adopted, the measures could enter into force around 2027, with the first compliance period expected to begin in 2028.

Overview

The proposed framework introduces a global mechanism to regulate the greenhouse gas fuel intensity (GFI) of energy used onboard ships.

GFI represents the life-cycle greenhouse gas emissions per unit of energy, expressed in grams of CO₂-equivalent per megajoule (gCO₂eq/MJ). The metric accounts for well-to-wake emissions, including upstream emissions from fuel production and distribution as well as emissions generated during ship operation.

Instead of implementing a single global carbon price, the framework combines:

• progressively declining GFI targets,
• a two-tier compliance system, and
• an IMO Net-Zero Fund that collects and redistributes revenue generated through compliance payments.

The system is intended to accelerate the transition toward low-carbon fuels and energy technologies, while providing financial support for the global maritime energy transition.

Scope

Geographical coverage:
The proposed framework would apply to international voyages worldwide, regardless of the ship’s flag.

Domestic voyages conducted entirely within the jurisdictionof a single state would fall outside the scope of the regulation.

Ship size threshold:
The regulation would apply to ships of 5,000 gross tonnage and above engaged in international shipping.

This threshold aligns with other IMO regulatory frameworks, including fuel consumption reporting under the IMO Data Collection System (DCS).

‍Greenhouse gases/ metrics covered:

The framework measures greenhouse gas emissions on a well-to-wake basis.

This includes the following gases:

• Carbon dioxide (CO₂)
• Methane (CH₄)
• Nitrous oxide (N₂O)

Lifecycle emissions would be calculated using IMO life-cycle assessment guidelines, which cover emissions from fuel production, transport, bunkering and onboard use.

The regulation therefore expands the emissions boundary beyond traditional tank-to-wake accounting, ensuring that upstream emissions associated with alternative fuels are also considered.

‍Exemptions:

Domestic trades are outside scope; further exclusions remain draft and may change.

Start date

The framework was approved at MEPC 83 (2025). The formal adoption is expected at an extraordinary MEPC session. If adopted

• entry into force will be earliest March 2027
• the first reporting year will be 2028.

Ships are expected to establish accounts within the IMO GFI Registry prior to the start of the compliance period to manage reporting and compliance balances.

GFI- Compliance Timeline

Responsible party

Responsibility for compliance would rest with the “Company” as defined under the International Safety Management (ISM) Code. This typically refers to the shipowner or the entity responsible for operational management of the vessel, holding the Document of Compliance (DoC).

Cost impact

Remedial Units and carbon pricing

The framework introduces a form of global emissions pricing through the purchase of remedial units.

For the initial implementation period 2028–2030, the proposed prices are:

‍IMO Net-Zero Fund

Payments associated with remedial units would be collected in a dedicated IMO Net-Zero Fund.

The fund is expected to support several objectives, including:

• financial rewards for zero- and near-zero emission fuels,
• support for developing countries, particularly small island developing states and least developed countries,
• funding for maritime decarbonization initiatives, and
• measures supporting a just and equitable energy transition.

Ships using zero or near-zero emission technologies and fuels may be eligible for financial rewards under the framework.

Compliance mechanism

GHG Fuel Intensity (GFI) pathway

The regulatory trajectory is based on a reference value of approximately 93.3 gCO₂eq/MJ, corresponding to the lifecycle emissions intensity of conventional marine fuels.

Reduction targets for the first implementation period have been proposed for 2028–2035, with longer-term milestones extending toward 2040.

The framework anticipates a 65% reduction in GFI by 2040 relative to the reference value, consistent with the IMO’s broader climate ambitions.

Further targets beyond 2035 are expected to be determined by the IMO before 2032, allowing the regulatory trajectory to evolve as technologies and fuel markets develop.

Compliance mechanism
The IMO Net-Zero Framework introduces two regulatory targets that determine compliance.

Each ship would calculate its attained annual GFI, based on the weighted average lifecycle emissions intensity of the fuels and energy used during the reporting year.

This value would then be compared against the regulatory targets to determine the ship’s compliance balance.

Compliance outcomes

Three compliance outcomes are possible:

1. Surplus (over-compliance)

Ships operating below the Tier 1 target would generate Surplus Units (SUs). These units could be:

• transferred to other ships,
• banked for up to two reporting periods, or
• voluntarily cancelled.

2. Tier 1 deficit

Ships with emissions between the two targets would generate a Tier 1 deficit.

This deficit would be addressed through the purchase of Tier 1 Remedial Units (RUs).

3. Tier 2 deficit

Ships exceeding the Tier 2 target would generate a larger deficit.

Operators would need to either:

• purchase Tier 2 Remedial Units, or
• acquire surplus units generated by other ships.

This structure is designed to ensure that the system generates predictable revenue while maintaining a strong incentive for fuel switching.

Commercial and operational implications

The proposed framework is expected to influence multiple aspects of maritime operations, including:

• fuel procurement strategies
• adoption of alternative fuels and propulsion technologies
• energy efficiency investments
• fleet deployment and voyage planning
• carbon compliance costs and credit markets

As regulatory targets tighten over time, compliance will increasingly depend on the availability, scalability and cost competitiveness of low-carbon fuels and energy technologies.

For shipping companies, integrating emissions data, lifecycle fuel analysis and regulatory forecasting into operational planning will be essential for managing long-term regulatory exposure and optimizing fleet strategy.‍
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IMO NFZ vs other IMO regulations

The IMO Net-Zero Framework is intended to complement existing efficiency regulations such as:

• Energy Efficiency Existing Ship Index (EEXI)
• Carbon Intensity Indicator (CII)

While EEXI and CII focus primarily on ship design efficiency and operational performance, the Net-Zero Framework regulates the lifecycle emissions intensity of fuels and energy sources used by ships.

It therefore represents a significant expansion of the IMO’s regulatory approach to maritime decarbonisation.

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