The International Maritime Organization (IMO) is expected to adopt its Net-Zero Framework in October 2025, with the measures entering into force in 2027.
According to the IMO, the framework will introduce guidelines that define zero- and near-zero-emission fuels (ZNZ fuels), establish emissions accounting and certification rules, and manage a central fund.
These guidelines are intended to play a central role in advancing the shipping sector’s energy transition while ensuring that the process is just and equitable.
An analysis published by the Global Maritime Forum (GMF) explains that the framework will rely on Global Fuel Intensity (GFI) targets, which measure a vessel’s greenhouse gas emissions per unit of energy used. While such targets will promote gradual decarbonisation and encourage uptake of transitional fuels like LNG and biofuels, they may not be enough on their own to incentivise long-term solutions such as e-fuels.
This is where the IMO’s planned reward mechanism is expected to make an impact.
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The GMF brief highlights that by 2030 the IMO could raise around $11–12 billion annually through penalties imposed on non-compliance with the framework. These funds will then be channelled into a reward system designed to encourage the use of scalable ZNZ fuels and ensure that no country or region is excluded from the transition.
E-fuels are considered particularly important as they represent a scalable option for achieving the IMO’s target of net-zero emissions by 2050. Meeting this trajectory requires at least 5 per cent of the shipping industry’s energy demand to be supplied by e-fuels by 2030. However, producers currently face high upfront costs, while off-takers remain hesitant to commit due to uncertainties over supply, prices and long-term returns.
This financing gap, often described as the sector’s ‘chicken-and-egg problem’, makes growth in this market difficult without policy support.
According to the GMF, the reward mechanism’s effectiveness will depend on two central elements: fuel eligibility and the level of rewards. The IMO could choose a technology-centric, emission-centric or hybrid model, with either the first or last option seen as most likely to provide investors and shipowners with long-term confidence while keeping the fund sustainable.
Different ways of setting reward levels are also under discussion. These include fixed rates, which are straightforward but carry liability risks; auction-based rewards, which provide price discovery and investment certainty but add administrative complexity; and hybrid methods such as contracts for difference, which directly close the cost gap between conventional and cleaner fuels.
The GMF notes that whatever approach is taken, the timeline will be crucial. Adoption of the framework in late 2025 and its entry into force in 2027 must be aligned with policies that enable large-scale e-fuel uptake.
Without this, the shipping sector risks falling short of its 2030 goal, undermining progress towards net-zero emissions by 2050.
