26/05/01
IMO net-zero proposal inches towards consensus
IMO net-zero proposal inches towards consensus
London, 1 May (Argus) — Consensus at the International Maritime Organization
(IMO) meeting of its Marine Environment Protection Committee (MEPC 84) this week
remained elusive, with the US leading countries opposed to the proposed Net-Zero
Framework (NZF) for greenhouse gas (GHG) reductions. But by late Friday evening,
the majority of member states eventually reached an agreement on the J7
document, which sets out future work for the Intersessional Working Group on
Reduction of GHG Emissions from Ships to be held between now and November. The
current proposed draft of the NZF , would require ships to reduce their fuel
intensity by at least 4pc in 2028, rising to 30pc in 2035, creating a global
carbon levy for shipping emissions. The creation of the NZF was approved at MEPC
83 in April 2025, but the planned approval of the regulation in October 2025 was
postponed to this October because of a lack of consensus. Countries this week
reviewed and debated plans for the proposed NZF, in hopes of finding consensus
ahead of the October vote. Several countries this week sought to reshape the NZF
proposal, with changes to the GHG pricing mechanism and global fuel intensity
(GFI) guidelines. But the atmosphere at MEPC 84 was markedly more constructive
than in the October meeting, some delegates told Argus . Formal adoptions at
MEPC 84 focused on ballast water management, marine plastic litter and bio
fouling, while discussions on the decarbonisation of the shipping industry were
treated as preparatory ahead of the planned October vote. IMO officials
repeatedly framed the talks as an effort to avoid a repeat of last year's
breakdown and to prepare the ground for agreement later this year. Proposals by
Liberia and Japan As part of the dialogue this week, member states proposed 57
amendments to the NZF. Several delegations reiterated their support for the
revised NZF proposal submitted by Liberia, co-sponsored by Argentina and Panama,
and a delegate told Argus this appears to be the main suggestion considered by
IMO member states. The Liberian proposal calls for adjusting the Global Fuel
Intensity (GFI) trajectory to reflect the demonstrated availability and uptake
of low-carbon fuels, rather than fixed aspirational targets, and proposes to
remove the creation of an IMO-managed fund financed by penalty payments. Under
the proposal, fuels would qualify as compliant only if they meet defined
viability criteria, including affordability, availability and scalability, with
costs capped at no more than 15pc above conventional bunker fuels. But member
states' views diverged mainly on the IMO-managed fund and the penalty payments
determined in the draft on which members failed to reach consensus in October
2025. Japan's proposal also emerged strengthened from the meeting, a delegate
said. The submission seeks the removal of mandatory payments to the IMO Net-Zero
Fund. Instead, Japan proposes that compliance deficits should be balanced solely
through market mechanisms, allowing ships to meet obligations by transferring
surplus units generated by over compliant vessels. The proposal also calls for
easing the Global Fuel Intensity (GFI) reduction trajectory from 2030 onwards.
Continued lack of consensus The US, Russia, UAE, Saudi Arabia and others were
opposed to the framework, while the EU, UK, China, Brazil and India were in
favour. US delegate and Federal Maritime Commission chair Laura DiBella said the
NZF is an unnecessary tax on US shippers and vessels operating in international
waters. "The NZF would cost the maritime industry billions of dollars annually,"
DiBella said. "As the largest consumer of imported goods, these costs will be
directly passed onto US consumers." Last year, the US threatened to retaliate
against countries that backed the proposal. The deferral of the vote last
October caused price declines in several alternative bunker fuel markets last
year. Without at least a two-thirds majority consensus in favour of the
framework, the IMO could potentially vote to adjourn or reject the NZF in
October. Despite the conflict of views, IMO secretary general Arsenio Dominguez
emphasised progress made in inter-sessional talks on the technical backbone of
the framework, particularly GHG fuel intensity calculation guidelines, fuel
certification and life cycle assessment methodologies. MEPC 84 discussions also
covered how to treat technologies such as onboard carbon capture and storage
(CCS), for which the IMO is drafting a future framework. The IMO on Wednesday
agreed to designate the North-East Atlantic ocean as an emissions control area
(ECA). This should boost demand for lower emission bunker fuels, such as very
low sulphur fuel oil (VLSFO), particularly for European LNG bunker markets,
where methane slippage has increased in importance. By Madeleine Jenkins and
Gabriel Tassi Lara Send comments and request more information at
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