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IMO eases 2030 fuel-intensity limits to revive net-zero
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The International Maritime Organization is considering a looser near-term curve for its 2030 fuel-intensity pathway to break a deadlock over adopting its shipping net-zero framework. Member states left a London working group that met 1 to 4 September without agreed legal text; the draft uses a reference value of 93.3 gCO2e/MJ and currently sets a 2030 base reduction target of 8% with a stricter 21% direct-compliance threshold. One compromise under discussion would reduce pressure on shipowners through 2030 while demanding deeper cuts toward 2040, a trade-off that could determine whether the framework is formally adopted at the end of this year.
Key takeaways
- The IMO working group met in London from 1 to 4 September and closed without agreed revised legal text.
- The draft framework uses a GFI reference value of 93.3 gCO2e/MJ and sets a 2030 base reduction target of 8% and a stricter 21% direct-compliance target.
- Member states approved the framework at MEPC 83 in April 2025 but failed to reach consensus in October 2025, causing a special adoption session to be adjourned for a year.
- The IMO asked governments to prepare compromise proposals before ISWG-GHG 23 (23–27 November) and MEPC 85 (30 November to 3 December), and the adjourned extraordinary MEPC session is due to resume on 4 December.
Table of contents
- Key takeaways
- What changed at the London talks held 1 to 4 September
- How the GFI framework allocates targets and creates incentives
- What a softer 2030 trajectory means for hydrogen-derived shipping fuels
- How adoption could still happen before year-end and what remains undecided
- Case for adoption versus reasons it may still stall
- What to be careful about
- Frequently asked questions
What changed at the London talks held 1 to 4 September
Delegates gathered in London from 1 to 4 September to try to finalise legal text for the IMO's greenhouse-gas fuel-intensity framework, but member states left without agreement. That working group was charged with resolving outstanding design choices that had kept formal adoption from taking place after an October 2025 impasse.
The central bargaining item is how steep the GFI curve should be by 2030. A proposal that has gained traction would ease the near-term trajectory, reducing immediate compliance pressure on shipowners, while preserving an obligation for steeper reductions later toward 2040. The working group instructed capitals to continue consultations and to bring compromise text to the next rounds of meetings.
How the GFI framework allocates targets and creates incentives
The draft framework measures ships against a lifecycle greenhouse-gas fuel-intensity reference value of 93.3 gCO2e/MJ. Compliance is expressed as a percentage reduction from that reference, rather than an absolute fleet emission cap.
The draft text circulated by the IMO sets two compliance lines for 2030: a base line requiring an 8% reduction and a stricter "direct compliance" line at 21%. Ships that fall short of their required reduction would face compliance costs; vessels that exceed the "direct compliance" line would be able to generate surplus compliance units to sell or bank under the mechanism in the draft.
What a softer 2030 trajectory means for hydrogen-derived shipping fuels
Easing the 2030 curve would reduce immediate demand-pull for low- and zero-carbon fuels because shipowners would face less near-term compliance pressure to switch away from higher-carbon energy. That change would affect projects built around fuels such as green ammonia and e-methanol, which rely on predictable offtake timelines to secure finance.
Developers and ports could still gain if a compromise breaks the logjam and the framework is adopted, particularly if the final text preserves explicit incentives for zero- and near-zero-emission fuels. That outcome is not settled: the draft's treatment of incentives and the unresolved carbon-pricing design remain key determinants of commercial viability for hydrogen-based marine fuels by the end of the decade.
How adoption could still happen before year-end and what remains undecided
The IMO's Marine Environment Protection Committee approved the framework in principle at MEPC 83 in April 2025, but formal adoption stalled in October 2025 when member states failed to reach consensus. Member states have been divided mainly over the carbon-pricing mechanism and over the exact shape of the GFI trajectory through 2030 and into the 2040s.
The IMO asked governments to table compromise proposals before ISWG-GHG 23 (23–27 November) and MEPC 85 (30 November to 3 December), with the adjourned extraordinary MEPC session scheduled to resume on 4 December. Those meetings will be the practical tests: negotiators must either agree text that balances near-term feasibility with long-term ambition, or postpone adoption again.
| Scenario | 2030 GFI change | Post-2030 direction | Notes |
|---|---|---|---|
| Existing draft (base) | Base reduction of 8% | Progressive reductions toward 2040 | Reference value 93.3 gCO2e/MJ |
| Existing draft (direct compliance) | Direct-compliance threshold 21% | Creates surplus compliance units if exceeded | Stricter line within the same framework |
| Softened compromise (under discussion) | Weaker than 8% in 2030 (unspecified) | Steeper reductions required toward 2040 | Designed to ease near-term pressure while keeping long-term ambition |
Case for adoption versus reasons it may still stall
The case for
- A softened 2030 curve could win support from transport-heavy flag states and shipowners and allow the framework to be adopted, which would deliver regulatory certainty for long-term fuel investments.
- If negotiators retain incentives for zero- and near-zero fuels in the final text, developers of green ammonia and e-methanol projects could recover momentum even with a weaker near-term target.
The case against
- A diluted 2030 requirement would reduce near-term demand signals for low-carbon fuels, slowing commercial offtake and making project financing harder to secure.
- The carbon-pricing mechanism remains unresolved; failure to settle it would leave the market without the compliance price signal many investors seek, risking further delay to adoption.
What to be careful about
- Extended regulatory uncertainty if countries fail to agree at the November–December meetings, delaying investment decisions for low-carbon marine fuels.
- A weaker 2030 trajectory could depress near-term offtake for green ammonia and e-methanol projects that target the end of the decade.
- Disagreement over carbon pricing may produce a framework that lacks a credible compliance-cost mechanism, reducing the incentive to switch fuels.
- A late adoption that tightens requirements after a soft 2030 settlement would create stranded assets and contract risk for shipowners who made intermediate investments.
The bottom line
Whether the IMO secures adoption of a net-zero fuel-intensity framework this year hinges on political trade-offs: easing the 2030 curve can unlock consensus but risks weakening near-term market signals for low-carbon fuels. The calendar of ISWG-GHG 23, MEPC 85 and the resumed extraordinary session in December are the decisive moments. For hydrogen-derived fuels such as green ammonia and e-methanol, the crucial questions are whether negotiators keep explicit incentives in the final text and how the carbon-pricing mechanism is resolved; those choices will determine whether projects planned for the end of the decade see demand materialise or face postponed offtake.
What to watch
- Watch for member states' compromise proposals ahead of ISWG-GHG 23 on 23–27 November; negotiators were asked to table options before that meeting.
- Watch the discussions at MEPC 85, scheduled for 30 November to 3 December, where text revisions may be finalised or forwarded to the resumed extraordinary session.
- Watch whether the adjourned extraordinary MEPC session, scheduled to resume on 4 December, moves to adopt the framework or extends the adjournment.
Frequently asked questions
What is the GFI reference value the IMO draft uses?
The draft framework measures fuel intensity against a reference value of 93.3 gCO2e/MJ; compliance is expressed as percentage reductions from that number.
What are the 2030 targets in the current draft?
The draft distinguishes a base reduction of 8% by 2030 and a stricter direct-compliance threshold set at 21%; the stricter line can generate surplus compliance units for ships that beat it.
Which meetings will decide whether the framework is adopted this year?
Governments were asked to bring compromise proposals to ISWG-GHG 23 on 23–27 November and to MEPC 85 on 30 November–3 December, with the adjourned extraordinary MEPC session scheduled to resume on 4 December.
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