IMO's Net-Zero Framework for Shipping Postponed

A motion to delay the adoption, tabled by Singapore and advanced by Saudi Arabia, passed on the final day of the session with 57 votes in favour and 49 against. The tight margin reflects the ongoing debate surrounding the framework and sends mixed signals to the shipping industry attempting to strategize in terms of future logistics costs and environmental compliance and investing in decarbonization. Various industry experts have pointed out critical gaps in the current NZF which should be addressed to ensure an equitable and sustainable transition for the global shipping industry. The delay will now give member states time to refine ambiguous or contentious elements to produce a stronger, more implementable framework.

The proposed NZF aims to reduce global greenhouse gas (GHG) emissions from the shipping industry by combining mandatory yearly emissions limits with penalties for failure to meet the set limits. NZF contains provisions requiring all oceangoing ships over 5,000 GT to reduce their annual GHG fuel intensity (GFI) from 2028. The GFI is calculated using a well-to-wake approach, measuring emissions from fuel production through to actual use onboard. If a ship emits below a certain threshold or fully switches to zero or near-zero emission fuels, it qualifies for financial rewards. If ships exceed the agreed emission levels, this will trigger CO2 levies.

The NZF is proposed to be included in a new Chapter 5 of Annex VI to the International Convention for the Prevention of Pollution from Ships (MARPOL). The regulations are expected to enter into force 16 months after the formal adoption, at which point governments will be responsible for enforcing them. 

Had the framework been adopted in October 2025 as originally planned, entry into force would have been around March 2027, with the first reduction requirements applying from 2028. The postponement now creates uncertainty as to when the NZF will take effect and whether it will be subject to substantial amendments.  

The NZF, even in a possible, amended form, represents a fundamental shift in maritime regulation, and early preparation will be key to ensuring compliance and maintaining competitive advantage. Our experienced shipping team follows the developments closely and is ready to help you navigate these changes and develop effective strategies for your future contracts, operations and investments.