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IMO’s Net-Zero Framework faces a formal adoption vote today. (Photo: iStock)
Update: IMO delays Net-Zero Framework adoption
After several days of negotiations, member states of the International Maritime Organization (IMO) failed to reach an agreement on the proposed Net-Zero Framework (NZF) during the second special session of the Marine Environment Protection Committee (MEPC ES/2), held at the IMO headquarters in London. Delegates voted to postpone further discussions until 2026.
The delay deals a major setback to countries such as the European Union and Brazil, which have strongly supported the shipping industry’s green transition. It also reflects the effectiveness of recent pressure tactics from the United States, casting fresh uncertainty over whether a global carbon pricing mechanism for shipping can be implemented as planned in 2027.
The following is the report from Oct. 17, 2025：
Nations at the International Maritime Organization (IMO) meeting in London are set to vote today to formally adopt the Net-Zero Framework (NZF) to cut shipping emissions, but questions are mounting over policy uncertainty and U.S.-led opposition.
Majority backs NZF, but U.S. pushes back
Despite the United States’ threats of retaliation against nations supporting the Net-Zero Framework (NZF), a majority voiced support during the opening session, including China, Brazil, and the European Union.
The NZF proposes a global carbon-pricing system under which high-emission vessels would face penalties, while revenues would reward cleaner ships. Unless opposed by one-third of countries or by nations representing half of the world’s tonnage, the framework will take effect in March 2027.
However, the U.S. is sailing against the tide. The smooth adoption process depends on retaining the original “tacit acceptance” procedure, but Washington has proposed switching to “explicit acceptance,” which would require written approval from two-thirds of member states for the NZF to be adopted. The World Shipping Council warned that such a time-consuming process could delay implementation by years or even decades. Nations are also set to vote on the acceptance procedure today.
Supporters call for stronger investment signal
As the policy debate unfolds, industry players are split over the framework’s ambition and investment signals. Seven major shipping associations, including the Japanese Shipowners’ Association and the Singapore Shipping Association, have urged adoption of the NZF, stressing that binding global regulation is essential to achieving climate-neutral shipping by 2050.
“Without the framework, shipping would risk a growing patchwork of unilateral regulations, increasing costs without effectively contributing to decarbonization,” said in the joint statement. The framework would be the strongest signal for investors and producers to scale up the production of alternative fuels, said Anne H. Steffensen, CEO of Danish Shipping.
E-fuel producers argue that the framework still falls short of providing a strong investment signal. Lacking targeted incentives, e-fuels remain at a disadvantage to LNG and biofuels, making large-scale deployment unlikely.
Globally, plans call for about 73 million tonnes of green hydrogen production per year by 2030, but only around 13% of that output is backed by offtake agreements. Without stronger policy signals, many projects may never reach Final Investment Decision (FID) or move into operation.
“E-fuel producers need policy certainty to get green shipping fuels off the ground. Shipping could become a major offtaker for hundreds of projects worldwide, but only under the right rules,” said Alison Shaw, IMO Manager at T&E.
Expert reveals NZF flaws
The current framework not only needs stronger incentives but also risks drifting off course due to its flawed design for setting greenhouse gas (GHG) emission targets, according to an analysis by Carbon Market Watch.
The NZF sets yearly targets to cut the GHG intensity of fuels, meaning ships must emit less GHG for every unit of energy used. Similar to the EU’s FuelEU Regulation, the system uses fixed reduction factors and applies penalties if ships fail to meet them.
The targets are set from 2028 to 2035 and become stricter over time, with an additional goal for 2040. However, the plan does not yet include a pathway to 2050, when global shipping is expected to reach carbon neutrality. Because the NZF only limits fuel emissions intensity, total emissions could still increase as shipping activity expands.
Under the current scheme, less than 15% of total emissions would be priced through 2035. (Chart: Carbon Market Watch)
This design may not be enough to meet the IMO’s own climate goals, which call for at least a 20% cut in emissions by 2030 and 70% by 2040 compared with 2008 levels. To stay on track, the analysis says the IMO should tighten the reduction factors and accelerate emission cuts to align with its 2030 and 2040 targets. While the NZF provides a necessary starting point, the analysis concludes that there remains significant room for improvement.
IMO chief: NZF not perfect, but the best option
Amid opposition and growing dissatisfaction, IMO Secretary-General Arsenio Dominguez reaffirmed that the NZF will provide the foundation for a transition toward net-zero emissions by 2050. He addressed calls for clearer regulations and targeted incentives, noting that “no specific fuel or technology has been excluded from the Net-Zero Framework as a compliance option,” while adding that further proposals will be discussed during the meeting.
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IMO Secretary-General Arsenio Dominguez said the NZF is not perfect but offers an orderly path toward net-zero by 2050. (photo: IMO)
“The IMO Net-Zero Framework is not perfect. However, it provides a balanced basis for our continued work on a number of elements ahead of its entry into force in 2027,” Dominguez said.
Source: Shipping Telegraph, Carbon Market Watch
Read more: IMO reaches initial deal on first global shipping carbon pricing
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