Norway’s IMO proposal: will more flexibility create a functioning surplus market?

Norway has proposed a substantial redesign of the IMO Net-Zero Framework, combining additional Surplus Units for zero- and near-zero fuels, five-year banking and broader use of surplus across both compliance tiers. The package offers a credible compromise, but its success depends on a difficult question: can the same surplus market deliver affordable compliance while providing a sufficiently high and predictable reward for investing in cleaner fuels?

Ahead of ISWG-GHG 23 and MEPC 85, Norway has submitted two closely related proposals, ISWG-GHG 23/2/5 and ISWG-GHG 23/2/6, seeking to address concerns with the IMO Net-Zero Framework (NZF). Rather than abandon the existing architecture, Norway proposes modifying its incentives and flexibility mechanisms while retaining the two-tier GHG Fuel Intensity (GFI) compliance system.

The proposal has several interesting features. It would reward the use of qualifying zero- and near-zero GHG fuels and technologies (ZNZs) through additional Surplus Units (SUs), rather than relying exclusively on monetary rewards from an IMO fund. It would extend SU validity from two to five years, allow SUs to balance both Tier 1 and Tier 2 deficits, and with that also replace Remedial Units with Voluntary Contribution Units (VCUs) as an alternative compliance route.

However, the package also places considerably more responsibility on the SU market. Surplus would no longer be merely an instrument for transferring excess compliance between ships. It would become a central determinant of the financial support delivered to ZNZ users.

This story was originally published by Hellenic Shipping News. Read the full story at Hellenic Shipping News →