The IMO Net-Zero Framework: Where It Stands and What to Do Now

The sequence of events

The IMO Net-Zero Framework is the most consequential piece of shipping regulation currently in play, and as of August 2026 it has not been adopted.

The adjournment was a genuine surprise to much of the industry, which had planned on adoption. It does not mean the framework is dead; it means the timetable moved and the political settlement is still being negotiated.

What the framework contains

Two mechanisms sit at its core, both applied to ships above a tonnage threshold engaged in international voyages:

1. A global fuel standard. A required reduction in the greenhouse gas intensity of the fuel used, tightening over time. This is a well-to-wake measure, so upstream emissions from fuel production count.

2. A global GHG emissions pricing mechanism. Ships exceeding the required intensity acquire remedial units; ships performing better than a defined threshold can earn surplus units. Revenue is intended to be directed to a fund supporting the transition, including for developing states.

Together these would be the first sector-wide, globally applied carbon price on any industry.

Why it matters even while it is unadopted

UNCTAD reports that more than 50% of newbuilding tonnage on order is designed for alternative fuels while over 90% of the active fleet by tonnage still burns conventional fuel. The industry has already committed capital on the assumption that carbon will be priced. Shipping emissions rose about 5% in 2024 over 2023, with a reduction observed in the first half of 2025 attributed largely to slower speeds and operational improvements.

An owner ordering a vessel today is making a 25-year decision. The framework's precise parameters matter less than the direction, which has not changed.

What owners should do regardless of the timetable

1. Know your baseline. Fuel consumption by type, per vessel, per voyage, with well-to-wake factors applied. Every future regime — IMO, EU or national — starts from this dataset. Fleets that cannot produce it cleanly will be compliant late and expensively.

2. Assume a carbon price. Put a shadow price on emissions in every investment case: newbuildings, retrofits, energy saving devices, hull coatings. The number will be wrong; making the decision without one will be more wrong.

3. Do the operational work now. Hull and propeller management, speed optimisation, trim, arrival planning and engine tuning reduce emissions immediately, cost little and are regime-agnostic. They also improve CII and reduce EU ETS exposure today.

4. Protect optionality on newbuildings. Fuel-flexible engines, tank space provision, and dual-fuel readiness cost money at build and cost far more as a retrofit.

5. Build the crew competency pipeline. Methanol, ammonia and LNG each need trained officers. The competency gap will bind before the fuel supply gap does.

6. Get the contracts right. Charterparty clauses allocating emissions cost between owner and charterer are now standard practice under the EU regimes. Whatever the IMO adopts, the same clause architecture will carry it.

How it interacts with the EU regimes

Europe did not wait. From 1 January 2026, EU ETS covers 100% of applicable emissions for in-scope voyages — 100% of intra-EU/EEA voyages and 50% of voyages between an EU/EEA port and a third-country port — and now includes methane and nitrous oxide alongside CO₂. FuelEU Maritime separately requires GHG intensity reductions against a 91.16 gCO₂e/MJ baseline: 2% from 2025, 6% from 2030, 14.5% from 2035, 31% from 2040, 62% from 2045 and 80% from 2050.

If the IMO framework is adopted, the relationship between it and the EU measures — whether the EU adjusts scope, and how double regulation is avoided — becomes the central commercial question. Owners should follow that debate closely, because it determines their total cost of compliance on European trades.

The realistic planning stance

Do not plan on a specific adoption date. Do plan on: a global carbon price arriving during the life of any vessel ordered now; well-to-wake accounting becoming the norm; and data quality being the gating factor for everything.