Countries at the International Maritime Organization (IMO) – the UN agency responsible for regulating maritime transport – agreed in April to a draft framework intended to reach net zero emissions by or around 2050. The organisation said its Net-zero Framework is the first in the world to combine mandatory emissions limits and greenhouse gas (GHG) emission pricing across an entire industry sector.

The draft framework – which follows decades of discussion and pressure – will introduce a price on emissions and a fuel standard for global shipping. It aims to accelerate the introduction of zero and near-zero GHG fuels, technologies and energy sources, and to support a just and equitable transition. ‘The framework represents another significant step in our collective efforts to combat climate change, to modernise shipping and demonstrates that IMO delivers on its commitments,’ said the agency’s Secretary-General, Arsenio Dominguez.

The framework applies to ships over 5,000 gross tonnage, which account for approximately 85 per cent of the sector’s CO2 emissions. It includes two components in terms of compliance. Firstly, a global fuel standard, based on emissions intensity. Secondly, what’s referred to as a ‘global economic measure’, which will apply a universal price akin to a tax on CO2 emissions in excess of the fuel standard.

The fuel standard includes two tiers of compliance, with a base target beginning at a four per cent reduction in emissions by 2028 compared with 2008, and a direct compliance target starting at a 17 per cent decrease.

‘As a general premise, it is definitely great, it’s historic,’ says Ursula Zavala, Climate Change Officer of the IBA Environment, Health and Safety Law Committee, who adds that, from a legal perspective, she has no negative view of the agreement. However, Zavala has some concerns about its effectiveness. ‘I’m not sure that this system […] will really lead us to a point where the environment will benefit,’ she says, as it may be cheaper to pay the penalties than to invest in the adaptations needed to decarbonise. 

‘I don’t want companies to have bigger penalties,’ as the cost will be passed on, probably to consumers, says Zavala, who’s also a counsellor at Rodrigo, Elias & Medrano in Lima. But the fact that it has taken so many years to agree this framework means that other measures will be needed in order to keep the costs down and still meet the environmental objectives, she says.

‘It’s good that there is a deal […] it’s a win for multilateralism but is not necessarily a win for the climate,’ says Felix Klann, Maritime Transport Policy Officer at Brussels-based NGO Transport & Environment (T&E). He says that a lack of safeguards jeopardises the Framework’s success. For example, Klann believes the penalties are ‘comparatively low’ against the cost of changing fuels. T&E had argued for an $800/tCO2e penalty, far higher than the $380/tCO2e the framework would begin with. 

‘Biofuels are probably the first means [by which vessels will be able to] comply for the foreseeable future, and we’ve seen, even without particular shipping targets or policies that incentivise biofuels, the price has already spiked above the penalty [level] in the past,’ Klann says. ‘We expect the price to rise again and the penalty to be insufficient.’

Klann also highlights uncertainty as to which types of biofuels will be considered for compliance, pointing to the FuelEU Maritime policy – a regulation to promote the use of renewable, low-carbon fuels and clean technologies for ships – as a model. This EU-wide legislation, which fully entered into force in 2025, excludes crop-based biofuels due to the high risk of land-use change – that is, feedstock would be grown on fields that would otherwise be utilised for food or carbon sequestration.

The IMO approach, however, currently has no exclusions on biofuels, so Klann expects they will be the first option ship operators will explore, especially as they tend to be easier to integrate into existing engines.

The draft framework was agreed by governments attending the 83rd session of the IMO’s Marine Environment Protection Committee (MEPC). The measures will be presented to an extraordinary session of the MEPC in October for formal adoption. If ultimately adopted, the measures will enter into force from 2027. 

The IMO was initially mandated to establish a framework to address the sector’s GHG emissions by the 1997 Kyoto Protocol, alongside the International Civil Aviation Organization (ICAO). While the ICAO finally agreed its sectoral system in 2016, talks at the IMO have been beset by an array of issues, including disputes about the best course of action, who bears responsibility for any fee imposed and the objectives of potential measures. 

Despite this, incremental progress has been made over the years. This includes the adoption of energy efficiency standards for ships in 2011 and a 2018 resolution on an initial strategy to reduce GHG emissions from shipping, as well as a wealth of data collection on subjects such as fuel use to better inform future policy. 

Klann is hopeful that the regime could be tightened over the years – via reviews of the system – and address some of the current shortcomings. Over a longer-term trajectory, if the IMO continues to improve the system, ‘it could reduce emissions very significantly’ by the late 2030s or 2040s, he adds. 

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