The IMO’s Net Zero Framework: Why supporters must stay strong

The IMO’s Net-Zero Framework is back on track. A majority of International Maritime Organization member states continue to support the framework - which aims to reduce greenhouse gas (GHG) emissions from ships in line with its 2023 greenhouse gas reduction strategy - and they deserve our respect and gratitude. These countries have withstood massive pressure - aimed at killing or weakening the Net-Zero Framework (NZF) - from the US, Saudi Arabia, UAE, other petro-states, and from the world’s two largest “flags of convenience” Panama and Liberia.

The NZF’s supporters have been further vindicated by this week’s landslide vote by the UN General Assembly to adopt the International Court of Justice’s climate crisis ruling. Now it is clear that "tackling the climate crisis is a legal duty under international law, and not just a political choice" .

While pressure on the NZF now seems to have eased somewhat, supportive governments - many of whom called for the NZF’s urgent adoption - will need to remain vigilant and strong in order to parry inevitable future attacks and attempts to further delay adoption, which is currently scheduled for early December.

The same applies to that majority of shipping industry stakeholders - such as port and shipping authorities and industry bodies that have supported the NZF and the 2023 IMO GHG Strategy that preceded it. They have a lot to lose through an unplanned, chaotic, and uncertain energy transition. Such a scenario will be disruptive, more costly and bad for business. Now is not the time for them to sit on the sidelines.

So why is the NZF - as it stands - so important? The framework includes a global fuel standard (GFS), requiring ships to gradually reduce how polluting their fuel is (i.e., how much greenhouse gas is emitted for each unit of energy used, across a fuel’s life cycle). The framework also introduces a mechanism that puts a price on the greenhouse gases ships emit, giving the shipping industry a clear financial reason to reduce emissions in line with the global fuel standard.

The NZF will apply to all oceangoing ships over 5,000 gross tonnage (GT) - responsible for over 85% of global shipping emissions. This is crucial - the global shipping industry emits around 3% of global emissions, equivalent to a major industrialised country like Japan - and reductions are essential if dangerous global heating is to be avoided.

While the NZF is not perfect - the Clean Shipping Coalition, along with many progressive states, wishes it had gone further and been more ambitious - it contains an important foundation that can be built upon in the future.

The IMO's 2023 GHG Strategy set out a roadmap for reducing greenhouse gas emissions from global shipping, with targets to reduce emissions by 30% by 2030, 80% by 2040 (both in comparison to 2008 levels) and to achieve net-zero emissions by 2050. This will only be possible if the NZF is adopted “as is”, and paired with a revised and strengthened Carbon Intensity Indicator - a key IMO tool for measuring and driving improvements in the energy efficiency and thus climate emissions of ships.

The NZF is set to be discussed at two IMO intercessional meetings, one in September and another immediately prior to December’s MEPC 85, which will itself immediately precede a resumed Extraordinary Session 2, during which the NZF is scheduled for adoption.

These intercessional meetings are only taking place before the planned adoption so that concerns about the NZF can be properly discussed. They are not a green light for alternative “technical measure only” proposals that are incapable of delivering the shipping climate obligations enshrined in the 2023 GHG Strategy.

Neither the Panama/Liberia/Argentina proposal nor the one from Japan are fit for that purpose, nor evidence sufficient support for approval - embarrassingly for Japan only 7 countries expressed support for progressing its proposal. The lack of a GHG pricing component in these two proposals means that the only option for enforcement is to arrest ships that are found to be non-compliant. Not only does this fail to raise the money that is essential to ensure a just and equitable transition and provide the necessary subsidising of higher-priced zero-emission fuels, it creates high-stakes risks for the industry which would have to make judgments on how best to manage their exposure to this ultimate sanction. And this can only result in high volatility and uncertainty in how decarbonisation and transport costs will evolve.

If the NZF was to be reopened at the request of those that want it weakened, those that want it strengthened would have every right to have their proposals considered as well. However, there really is no need for reopening this process - the NZF is as it is because it already represents a carefully negotiated balance of interests.

Every alternative has already been considered and failed to gain enough support. If conducted in good faith a lengthy re-litigation process would in all likelihood end up in the same place, with valuable time lost.

Supporters of the NZF, IMO member states in particular, but also industry stakeholders, must be clear: the NZF “as is” is the only option on the table with the potential of delivering the commitments made in 2023, and any alternative policy framework that stalls the maritime energy transition - or reverses it - is unacceptable. The stakes are too high.

In a world that is getting hotter, the Net-Zero Framework will bring certainty to the shipping sector, and give shape to an energy transition that leaves no country behind. Governments that have supported the Net-Zero Framework must now double their efforts to protect it as it moves towards IMO adoption.