The IMO NZF as agreed upon in 2025 still remains the most likely way to achieve the IMO 2023 GHG strategy

MEPC 85 is coming up fast, and negotiations for what the Net Zero Framework will look like are increasing in intensity. With several proposals on the table, it is likely that the outcome will be a composite, blending together different aspects of each proposal – although none of the new ideas have improved the entire regulation impact and the NZF as agreed upon in 2025 still remains clearly the most likely way to achieve the revised 2023 GHG strategy.

Any policy that is adopted needs to continue to support the IMO’s GHG goals. With each operational component of the NZF subject to separate negotiations, it is important to ensure the overall goals of the GHG Strategy are achieved.

UCL and Rocky Mountain Institute have conducted a sensitivity analysis on structural elements of the NZF, focusing on GFI trajectories and compliance prices (Remedial Units or Direct Contributions), as well as measuring the impact of differing ZNZ fuel reward schemes. This work has informed the recent Institute of Marine Engineering, Science & Technology (IMarEST) submissions (ISWG-GHG 23/2/9, 23/3/7, and 23/3/8 – see below). We have found (unsurprisingly) that higher ambition GFI trajectories with higher RU prices results in lower cumulative emissions. RMI/UCL Shipping and Oceans Research Group modelling has clarified:

The GFI trajectory effectively sets the emissions allowed, making it one of if not the centerpiece of the entire policy; with negotiations considering loosening of the trajectory, there is possibility of undermining the entire purpose of the NZF as even slightly loosening the trajectory results in higher near-term emission while making later emission reduction more expensive and disruptive.

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