backOn October 17, 2025, the International Maritime Organization (“IMO”) voted to delay, for 12 months, its long-awaited decision on adoption of rules to decarbonise international shipping.
A new vote on the so-called IMO Net-Zero Framework is scheduled to take place in October 2026 (the “Framework”).
The decision delays clarity for ship owners, ship builders and fuel producers on regulations that would underpin investments for decarbonising international shipping, which many of the world’s largest shipowners have committed to pursuing. However, it creates opportunities for further closing gaps and addressing the concerns of certain countries ahead of the rescheduled vote in 2026.1The Marine Environment Protection Committee during its second extraordinary session held in London, voted on 17 October 2025 to defer the formal vote on the adoption of the IMO Net-Zero Framework by one year, rescheduling it for October 2026.
In formal terms, this was not a vote on the Framework itself, though political objections to its implementation brought about the postponement.2The IMO Net-Zero Framework is a draft amendment to Annex VI of the MARPOL Convention, relating to “Regulations for the Prevention of Air Pollution from Ships”. It specifically comprises a proposed new Chapter 5, which was provisionally agreed on April 11, 2025, during the IMO’s 83rd session of the Marine Environment Protection Committee (“MEPC 83”). There is reason to think that, unless the politics change, there will be further hurdles to its adoption. The postponement of the decision on the Net-Zero Framework keeps the proposed instrument alive for a further year, during which we may see its shape and scope change.
Overview of the Proposed IMO Net-Zero Framework
The Framework, which was provisionally agreed by the IMO in April 2025 but which had not yet been formally voted into international law, aims to provide significant incentives for shipowners – and the fuel producers and bunkering companies supplying them – to substitute unabated fossil-derived fuels for renewable and low-carbon fuels. It proposed doing so through imposing both a mandatory limit on the carbon intensity of energy used aboard ships, together with a system of penalties on non-compliant ships through a form of global carbon pricing mechanism, the amount of which would differ depending on the actual carbon intensity of a ship’s energy use.3More specifically, the IMO Net-Zero Framework introduces mandatory GHG emissions reduction targets—the “Base Target” and the “Direct Compliance Target”. Penalties are imposed on non-compliant ships. Specifically, ships that fail to meet these targets must purchase “Remedial Units” or “RUs”. RUs are acquired by paying into the IMO Net-Zero Fund. On the other hand, ships will get rewarded for using cleaner fuel. For example, they will generate “Surplus Units” when achieving GHG emissions reductions beyond those required by the Direct Compliance Target.
The Framework is intended to be a key pillar of the IMO’s revised Strategy on the Reduction of Greenhouse Gas (“GHG”) Emissions from Ships, which was adopted by the IMO in 2023. The Strategy targets net-zero maritime GHG emissions by or around 2050 through accelerating deployment of zero and near-zero GHG emissions technologies, fuels and/or energy sources, including renewable and low-carbon fuels. Although recent events call into question support for the Framework as currently drafted, the overarching policy objective of the IMO remains in place.
For more information on the content and structure of the proposed Framework, see our previous Client Alert.
Context of the October Meeting in London
In the run-up to the October meeting of the IMO in London, several states submitted comments, studies, and observations to the IMO, with some expressing concerns about the Framework.
The United States, in particular, strongly opposed the Framework’s adoption. It submitted an impact assessment to the MEPC4Marine Environment Protection Committee., urging states to reject the Framework, citing the significant economic burden it would impose on the global commercial shipping industry.5MEPC/ES.2/2/8, 11. Additionally, in a Joint Statement issued by the Secretaries of State for Energy and Transportation, the United States called on countries to oppose the adoption and outlined possible measures against nations that supported the Framework.6US Department of State press release, “Taking Action to Defend America from the UN’s First Global Carbon Tax – the International Maritime Organization’s (IMO) “Net-Zero Framework” (NZF),” 10 October 2025.
Alongside the United States, other countries, including Bahrain, Iraq, Kuwait, Saudi Arabia, Sierra Leone, the United Arab Emirates, and Venezuela, submitted a detailed socio-economic analysis to the MEPC, highlighting the inflationary impact of the Framework on commodity costs.7MEPC/ES.2/2/7.
Conversely, the European Union (“EU”), through a statement issued by the European Commission on October 12, 2025, reiterated support for the Framework, describing it as “a significant milestone.”8European Commission, “Statement Ahead of the IMO’s Marine Environment Protection Committee (MEPC) Meeting,” 12 October 2025.
For some, an objectionable aspect of the proposed Framework was the manner in which it deferred responsibility for defining important future aspects of the rules to the IMO Secretariat (rather than the states parties to the MARPOL Convention) without sufficient controls, safeguards or parameters for states. In other words, states are concerned that there would have been significant discretionary power reposed in the Secretariat that would not necessarily be subject to approval by the states parties to the Framework, and were also concerned about the potential expansion of IMO discretionary power over time.
What Happened at the IMO Meeting in London in October 2025?
On October 17, 2025, during the final day of the extraordinary MEPC session, a majority of 57 states voted to postpone the formal vote on the Framework for one year, while 49 voted to proceed to a vote and 29 abstained or were not present. As a result, the vote on the adoption of the IMO Framework was delayed and rescheduled for 12 months’ time, i.e. likely in October 2026.9IMO, Press release, “IMO’s Marine Environment Protection Committee Adjourns Discussions on the Adoption of the Net-Zero Framework for One Year,” 17 October 2025.
Due to the postponement, the earliest possible entry into force for the Framework would be March 1, 2028 (should it be adopted in October 2026) following the mandatory acceptance period required prior to its entry into force.
There is likely to be significant diplomatic activity from states and other interested parties between now and the next meeting of the MEPC in late April 2026. In addition, the IMO has continued working, through Intersessional Working Groups, to continue developing the implementing guidelines contemplated under the Framework. These guidelines would not only be important for the implementation of the Framework (should it be adopted) but their details could also be instrumental in facilitating a potential consensus amongst states during the forthcoming negotiations on the Framework’s future shape.
Concluding Remarks and Next Steps
Many of the world’s largest shipping companies have already made corporate commitments to decarbonise their fleets and are investing in ships with alternative technologies and fuel supply chains, including LNG, ammonia and methanol, of the fossil fuel, e-fuel, low-carbon and biofuel varieties. Since the IMO Framework takes a technology-neutral approach, focussing on GHG emissions rather than picking and choosing technology winners, all of those sources of energy could play a role. Prospective fuel producers seeking to deploy some or all of these technologies around the world need the regulatory clarity from clear adoption of harmonised rules at the international level to support their investments and allow the signing of long-term offtake agreements and the raising of finance to fund infrastructure. The prolonged uncertainty also creates challenges for ship builders and designers, given the high cost of retrofit to convert vessels to alternative fuel sources and the long capital life of new ships. This may lead to higher upfront costs for building in greater fuel-switch capabilities for new ships, to allow adaptation to the evolving regulatory landscape over time.
Shortly after the outcome of the IMO October meeting, the EU published an updated policy position paper: its “Sustainable Transport Investment Plan” (“STIP”). In the STIP, the EU reiterates that it is fully committed to meeting the decarbonisation mandates imposed under EU law on the maritime and aviation sectors. In the maritime sector, the EU Emissions Trading System (“EU ETS”) and FuelEU Maritime Regulation already impose decarbonisation requirements on shipping. This is because those EU regulations apply to 50% of the GHG emissions from voyages between an EU and a third country. In the STIP, the EU made clear that it will maintain these regulations and seek to provide further financial support to stimulate production of renewable fuels (both e-fuels and biofuels) to facilitate compliance. The timing of the STIP’s publication in the wake of the IMO decision is no coincidence: the EU continues to emphasise a commitment to decarbonising the maritime and aviation sectors despite headwinds from other key stakeholders among the international community.
However, without other key global players on board, unilateral imposition of rules to decarbonise international shipping creates political risk and regulatory instability that undercut the investment thesis for would-be low-carbon fuel producers and users. The next 12 months provide an opportunity for states to further shape the rules to identify whether a consensus can be reached. The outcomes of the next formal meeting of the MEPC in late April 2026 will be a crucial temperature check.