International Maritime Organization (IMO)

The framework sets binding emissions intensity reduction targets for ships, with penalty payments being required for those who fail to meet them. While the framework was approved in April 2025, governments have an opportunity to propose changes to the framework before it goes into force in 2027, as well as after. The current framework covers three key areas, and only for vessels over 5,000GT despite vessels between 400 and 5,000GT being responsible for a large proportion of total shipping emissions:

• greenhouse gas fuel intensity reduction 
• generation and distribution of revenue to ensure a just and equitable transition, and zero or near-zero emissions (ZNZs)
• regulations and guidelines on ZNZs.

Our guide on the IMO Net-Zero Framework provides more details on this.

UCL Shipping and Oceans Research Group estimate that the Framework’s regulations would result in a 10% reduction in emissions by 2030, yet the Framework strategy stated a target of 30%. Within the parameters of the Framework, a 30% reduction is unlikely by 2030 as there is not enough incentive to speed up the transition by then. Shipping companies might adopt the new cost of paying for their pollution into their operations instead of seeking for alternatives. UCL Shipping and Oceans Research Group also state that it is only forecast to generate $11-12bn, which is not enough to support a just and equitable transition in energy.

The agreement could also push companies to biofuels rather than renewable hydrogen e-fuels, however, not all alternative fuels will have a positive impact on the climate.

While the Framework is a historic step for global shipping, current targets fall short of what’s needed for a truly just transition. Read about the critical areas where policymakers must push for higher ambition to align the industry with the Paris Agreement.

Japan’s latest proposal for changes to the NZF would significantly alter the agreed policy architecture, undermining even further the chances of making the 2023 Revised Strategy a reality. The primary changes involve: removing the Net-Zero Fund, the key pillar of “economic measure”; making the purchase of Surplus Units (SUs) the primary mechanism for addressing compliance deficits; and introducing an industry-led “direct contribution” as a global financing mechanism. Our analysis shows the stark costs that would need to be covered based on the climate impact of not acting now and proceeding with the Net-Zero Framework.