The IMO is preparing to revisit its draft global fuel-standard and emissions-pricing framework in December. Shipowners need operational readiness regardless of the outcome.

Political disagreement over a regulation does not automatically exempt a vessel engaged in global trade from the commercial, contractual, or regional requirements surrounding that regulation.

By Capt. Francis Modozie, 

MNI  |  Master Mariner (Unlimited Tonnage)  |  Founder & Principal, SeaFleet Backbone LLC

 This article neither advocates nor opposes adopting the proposed IMO Net-Zero Framework. Instead, it examines the regulatory status, as well as the operational, commercial, and workforce-readiness implications for shipowners and fleet managers. Regulatory position verified: 3 October 2026.

Citation note: Numbered source markers correspond to the hyperlinked official references at the end of this manuscript.

International shipping is approaching another important regulatory decision point.

The second extraordinary session of the Marine Environment Protection Committee (MEPC) of the International Maritime Organization (IMO), which was adjourned in October 2025, is currently scheduled to resume on 4 December 2026, subject to discussions at MEPC 85 immediately beforehand. The proposed IMO Net-Zero Framework is at issue: draft amendments to MARPOL Annex VI that are designed to combine a global marine-fuel greenhouse-gas standard with an economic compliance mechanism.[2] 

The outcome remains uncertain. However, for shipowners and fleet managers, uncertainty at the IMO does not remove the operational question: can a fleet accurately measure, document and manage its greenhouse gas exposure under whichever regulatory and commercial environment ultimately emerges? In fact, it makes it more pressing: can a fleet accurately measure, document and manage its greenhouse gas exposure in whichever regulatory and commercial environment ultimately emerges?

This issue has far-reaching implications that extend well beyond environmental compliance. It affects fleet investment, bunker procurement, voyage planning, charter-party allocation, machinery strategy, ship finance, crew competence, and the quality of data exchanged between ship and shore. Decarbonisation is increasingly becoming a matter of fleet governance

Where the negotiation stands

The overall direction was established in 2023. IMO's revised GHG Strategy calls for international shipping to reach net-zero greenhouse-gas emissions by or around 2050, taking different national circumstances into account. It established indicative checkpoints of at least a 20% reduction in total annual GHG emissions by 2030, striving for 30%, and at least 70% by 2040, striving for 80%, compared with 2008. 

The strategy also set an ambition for zero- or near-zero-GHG technologies, fuels and energy sources to represent at least 5% - striving for 10% - of the energy used by international shipping by 2030. 

The more difficult question has always been how to translate those ambitions into mandatory international regulations. At MEPC 83 in April 2025, the IMO's Member States approved the draft amendments that established the Net-Zero Framework. The amendments were scheduled for formal adoption at the second extraordinary MEPC session in October 2025. However, the meeting was instead adjourned for one year.

Technical work continued. ISWG-GHG 22 convened in London from 1 to 4 September 2026, considering proposals to address concerns regarding the draft MARPOL amendments. The IMO's official summary records the ongoing negotiations and states that the preparation of detailed implementation guidelines and further work on lifecycle GHG assessment were deferred to ISWG-GHG 23, which is scheduled to take place from 23 to 27 November. MEPC 85 will take place from 30 November to 3 December, after which the adjourned extraordinary session is scheduled to resume on 4 December, subject to the outcome of MEPC 85. It is important to note that while the 2050 strategy exists, the proposed regulatory framework intended to help implement it has not yet been adopted.

Political agreement is still developing. Operational readiness cannot wait for it.

What the current draft would do

The draft regulations for April 2025 would establish a new Chapter 5 of MARPOL Annex VI, which would apply to ships with a gross tonnage of 5,000 or more, subject to the exclusions contained within. The central measurement is the ship's annual GHG Fuel Intensity (GFI). Unlike systems that are concerned only with emissions produced when fuel is burned on board, GFI is calculated on a well-to-wake basis. This incorporates lifecycle emissions associated with the energy source into the compliance calculation. 

The draft establishes two trajectories: a Base Target and a more demanding Direct Compliance Target. The respective reduction factors start at 4% and 17% in 2028, increasing to 30% and 43% by 2035 relative to the 2008 GFI reference value. A ship performing better than the Direct Compliance Target could generate surplus units. Subject to the final rules, these units could be transferred, stored, or voluntarily cancelled. Ships falling short would face compliance deficits.

Under the current draft, the initial remedial unit prices for the reporting periods from 2028 to 2030 are set at US$100 per tonne of CO₂-equivalent for Tier 1 units and US$380 per tonne for Tier 2 units, calculated on a well-to-wheel basis. The draft requires the International Maritime Organization (IMO) to subsequently determine the applicable pricing mechanism from 2031 onwards. 

While these figures are important, they should not be mistaken for set law. The draft can still change. A more enduring strategic point is the architecture: measuring lifecycle fuel intensity, establishing progressively tighter performance thresholds and attaching economic consequences and incentives to performance.

Regulation is not waiting for London

For operators trading to Europe, carbon-related regulation is already a commercial reality.

Maritime transport entered the EU Emissions Trading System in 2024. For emissions generated in 2026, the scheme reaches its fully phased-in level for covered emissions, while methane and nitrous oxide join carbon dioxide within ETS coverage. The geographical formula is commercially significant: 100% of covered emissions from voyages between EU ports and within EU ports are included, while 50% of emissions on voyages between an EU port and a non-EU port are covered. ^[5]

FuelEU Maritime has applied since January 2025. Rather than pricing each tonne in the same way as ETS, FuelEU limits the annual average lifecycle GHG intensity of energy used onboard qualifying ships calling at European ports. Its required reduction began at 2% in 2025, rises to 6% in 2030 and becomes progressively more demanding thereafter. ^[6]

An IMO delay therefore does not suspend regional obligations. For internationally trading fleets, the practical challenge is already broader than the fate of one IMO meeting. Owners increasingly have to manage overlapping global, regional, flag-state, charterer and financing expectations.

Figure 1. Annual GFI reduction factors in the April 2025 IMO draft. These values are draft regulatory parameters and are not yet legally binding. 

Capital providers are measuring performance too

Regulatory authorities are not the only institutions paying attention to shipping emissions. The Poseidon Principles currently bring together 36 financial institutions representing nearly three-quarters of global ship finance. Their methodology measures the climate alignment of participating institutions' shipping portfolios against trajectories linked to IMO's GHG ambitions.

In 2026, the initiative expanded associate membership to include marine insurers and related organisations. This does not mean that one poor carbon-intensity number automatically produces a specific interest-rate increase. It does mean that emissions performance and the quality of underlying data are becoming increasingly visible within the institutions that finance and insure maritime assets. 

For owners, reliable emissions data is therefore becoming part of the broader commercial profile of the fleet.

Five readiness priorities for shipowners

1. Data integrity

Existing fleets already generate large quantities of information through IMO DCS, CII, SEEMP, bunker documentation, machinery records and, where applicable, EU MRV. The next challenge is not simply gathering more data. It is ensuring that the information is consistent, traceable and capable of independent verification when financial consequences are attached to it.

2. Fuel and asset strategy

Owners considering newbuildings, life-extension programmes, retrofits or major machinery investments should examine how much fuel and technology flexibility today's decisions preserve. This does not require predicting a single winning future fuel. It requires avoiding unnecessary technological lock-in while understanding the vessel's likely trading profile, remaining economic life and available infrastructure.

3. Commercial allocation of responsibility

Charter parties, bunker-procurement arrangements and management agreements will increasingly need to address questions that were once primarily operational: Who determines the fuel? Who controls speed and routing? Who owns or benefits from a compliance surplus? Who carries a deficit generated by a commercial instruction? The current IMO draft itself recognises operational responsibility by referring to decisions concerning fuel, cargo, route and speed when addressing recovery of compliance-related costs. ^[4]

4. Verification readiness

Shipping has always operated through evidence - statutory certificates, bunker delivery notes, engine records, logbooks, survey reports and maintenance histories. Decarbonisation adds another evidence chain. Fuel provenance, lifecycle-emissions characteristics, energy use and compliance calculations must ultimately connect the physical fuel entering the ship with the verified regulatory record ashore.

5. Crew competence

Alternative fuels change the operational risk profile of a vessel. Methanol, ammonia, hydrogen, battery systems and other emerging solutions introduce different requirements for containment, toxicity management, fire response, bunkering, emergency procedures and technical competence. IMO has issued generic interim training guidance for alternative fuels and new technologies, and in 2026 issued fuel-specific interim guidance for methyl/ethyl alcohol and ammonia. The energy transition will therefore succeed or fail partly through the competence of the people expected to operate the new technology.

Readiness matrix: what management should be able to answer

The United States dimension

The United States remains formally opposed to the current draft framework. In August 2025, the U.S. Departments of State, Commerce, Energy and Transportation issued a joint statement opposing the proposal and characterising it as a 'global carbon tax'. In August 2026, Federal Maritime Commission Chairman Laura DiBella again stated that the framework in its current form should be rethought before international acceptance and implementation, while calling for a broader range of alternative fuel pathways. ^[

IMO describes the proposal differently: as a performance-based framework built around GHG-intensity limits, tiered compliance payments, surplus units and a dedicated Net-Zero Fund. These are competing policy characterisations of an unresolved international negotiation. 

This article does not take a position on which policy approach should prevail. For shipping companies operating in the US, the practical issue is more specific: they may operate foreign-flag tonnage, call at ports in jurisdictions with their own carbon rules, charter to multinational cargo interests, borrow from international lenders, and purchase bunkers in various regulatory environments.

The eventual legal exposure of any particular vessel will depend on the final IMO text, MARPOL implementation, flag-state obligations, regional measures and trading pattern. Owners should therefore distinguish political position from operational exposure and obtain legal advice where treaty or contractual applicability is uncertain

Operational principle: Political disagreement over a regulation does not automatically exempt a vessel engaged in global trade from the commercial, contractual or regional requirements surrounding that regulation.

From the bridge to the boardroom

After decades in vessel operations, I see the maritime energy transition as more than a question of which fuel eventually powers the ship. It is a question of whether the organisation can connect vessel condition, machinery performance, voyage planning, bunker procurement, emissions information, crew competence, commercial contracts and shore-side governance.

A regulation may be negotiated in London. Its underlying evidence is created elsewhere - at the bunker manifold, inside the engine room, in machinery records, through the noon report, within the voyage plan, and in decisions exchanged between vessel and shore management.

Related: Capt. Francis Modozie writes: The global seafarer shortage cannot be solved by recruitment alone

That is why operational experience matters. A decarbonisation strategy that exists only in the boardroom is incomplete. A compliance programme that exists only onboard is equally incomplete. The strongest fleets will be those in which the two are connected. Shipowners do not need to predict today exactly what Member States will decide when negotiations return to IMO later this year. They do need to know whether their fleets can respond intelligently to whatever follows.

Net zero may still be under negotiation. Readiness should not be.

For shipowners and fleet managers: where is your greatest readiness gap today - fuel strategy, data verification, vessel technology, crew competence, or commercial contracts?

Related: Capt. Francis Modozie writes: Why Port State Control Detentions Are Usually Preventable?

About the author

Capt. Francis Modozie, MNI, is a Master Mariner (Unlimited Tonnage) with more than 25 years of international maritime and vessel-operational experience. He is Founder & Principal of SeaFleet Backbone LLC, a maritime advisory and readiness business supporting shipowners, operators, and maritime organisations across marine operations, compliance, vessel governance, workforce readiness, and digital maritime systems.

Contact: contact@seafleetbackbone.com   |   Website: seafleetbackbone.com

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