IMO Net-Zero Framework: What Adoption, Delay or Failure Means for Shipping Compliance Costs in 2027–2030
Green Fuel Journal Research & Intelligence Team — see our Editorial Standards and AI Usage Disclosure for how this report was produced and verified.
Last reviewed: October 2026 · Next review trigger: MEPC 85 outcome (30 November–4 December 2026)
THIS REPORT IS IN 2 PARTS
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This report is general research and analysis. It is not legal, financial, investment, engineering or safety-certification advice, and it does not endorse any company. Company-claimed figures are labelled as such, and modelled or illustrative figures are not liabilities. Readers should not rely on it to make a commercial, regulatory or investment decision without independent professional advice and a check against primary sources.
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Executive Summary
The IMO Net-Zero Framework remains unadopted after a 57 to 49 vote on 17 October 2025 to adjourn adoption by a year, and the next decision points are MEPC 85 (starting 30 November 2026) and a possible resumed session on 4 December 2026. Entry into force takes about 16 months after adoption (10 months of tacit acceptance plus 6 months), so the framework would add no cost in 2027 in any scenario and would start around March–April 2028 if adopted in December 2026 [ANALYST ARITHMETIC]. The approved draft fixes remedial unit prices at USD 100 and USD 380 per tonne of CO2e to 2030 [DRAFT], but the evidence reviewed holds no independent estimate of a fleet's total bill for 2027–2030. MEPC 84 (27 April–1 May 2026) made no design decisions, BIMCO called convergence by December difficult on 10 September 2026, and a slip to MEPC 86 in October 2027 would push entry into force to around 2029 [ANALYST ARITHMETIC].
Modelled fund revenue is USD 10–15 billion a year in the early years [MODELLED]. The only vessel-level figure found, from a single source, puts a 2028 medium-range tanker burning 5,000 tonnes of heavy fuel oil at USD 356,000 a year [SINGLE-SOURCE]. Regional costs are already fixed: EU ETS surrender reaches 100% of 2026 emissions, and the Commission's July 2026 proposal contains a review clause, not an offset, despite its pledge that European companies will not pay twice. The global layer is the only one that moves between scenarios.
Pacific Basin cancelled four methanol dual-fuel Ultramaxes in April 2026, citing the failure to adopt the framework in October 2025, and cut the total contract price from USD 181.6 million to USD 156.8 million by switching to conventional ships. DNV data show methanol dual-fuel orders at 2 in the first half of 2026 against 40 a year earlier, while LNG-capable orders stayed dominant at 73 of 137. Sustainable methanol averaged USD 48.69 per gigajoule in Singapore in July 2026 against USD 18.66 for 0.5% fuel oil, about 2.6 times on one port and one month [SINGLE-SOURCE]. Owners are pricing the uncertainty into fuel choice, and the commercial question for 2027–2030 is how much optionality to buy before the decision is made.
1. Executive Intelligence Synthesis
Direct answer
The IMO Net-Zero Framework is not adopted. Member states voted 57 to 49 on 17 October 2025 to adjourn, and decisions now fall between 23 November and 4 December 2026. The approved draft sets remedial unit prices of USD 100 and USD 380 per tonne of CO2e to 2030 [DRAFT]. The framework adds no cost in 2027 in any scenario [ANALYST ARITHMETIC], while EU and UK costs already apply whatever the IMO decides.
1.1 Five Executive Signals
Signal 1: Status.
FINDING: The framework is not adopted, MEPC 84 set no timeline, and the decision window runs from 23 November to 4 December 2026, with MEPC 86 in October 2027 as the fallback (DNV; Maritime Executive).
SO WHAT: A board can neither book the framework's cost as certain nor remove it from the plan.
NOW WHAT: Hold the global cost line as a scenario input and review it after MEPC 85 and any resumed session on 4 December 2026.
Signal 2: Timing.
FINDING: Entry into force takes about 16 months after adoption, so adoption on 4 December 2026 would start the framework around March–April 2028 [ANALYST ARITHMETIC]; DNV puts the earliest possible entry into force at 1 March 2028 (DNV, 17 October 2025).
SO WHAT: A finance team can budget a zero framework charge for 2027 under every scenario.
NOW WHAT: Set the 2027 budget on EU and UK costs alone and review it after MEPC 85.
Signal 3: The money fight.
FINDING: At ISWG-GHG 22, 38 countries backed a carbon price and revenue mechanism and 17 opposed, Japan has since proposed removing the Fund, and the USD 100 and USD 380 prices are fixed only to 2030 [DRAFT].
SO WHAT: Until the money mechanism settles, no source can give a firm total framework cost for 2028–2030.
NOW WHAT: Treat any consultant or vendor figure for 2028–2030 as a modelled estimate and ask which price and Fund assumptions sit behind it.
Signal 4: Regional costs are fixed.
FINDING: EU ETS surrender reaches 100% of 2026 emissions [ADOPTED], FuelEU Maritime has applied in full since 1 January 2025 [ADOPTED], and UK ETS maritime began on 1 July 2026 [ADOPTED].
SO WHAT: These costs apply whatever the IMO decides, and the Commission's July 2026 text offers a review clause, not an offset [PROPOSAL].
NOW WHAT: Budget regional costs as fixed and do not net an assumed IMO credit against them.
Signal 5: Capital behaviour.
FINDING: Pacific Basin cancelled four methanol dual-fuel Ultramaxes in April 2026, DNV counted 2 methanol orders in the first half of 2026 against 40 a year earlier (Argus), and Singapore methanol cost about 2.6 times fuel oil per GJ in July 2026 [SINGLE-SOURCE].
SO WHAT: Owners are paying for fuel flexibility through their order books while the rule is unsettled.
NOW WHAT: Tie each commitment to a dated trigger, such as the 4 December 2026 session or MEPC 86, rather than to a calendar quarter.
Signal | Label | Date to watch |
1. Status | Not adopted | 4 December 2026 |
2. Timing | Analyst arithmetic | 1 March 2028 at the earliest (DNV); March–April 2028 by arithmetic |
3. The money fight | Draft; modelled | MEPC 85, from 30 November 2026 |
4. Regional costs | Adopted; proposal | 30 April 2028 (UK first surrender) |
5. Capital behaviour | Single-source | February 2027 (Pacific Basin option) |
1.2 Evidence cut-off and update note
FINDING: This report rests on evidence reviewed to 30 October 2026, and nothing on IMO decisions after Japan's 21 October 2026 submission was found.
SO WHAT: ISWG-GHG 23 (23–27 November), MEPC 85 and a possible 4 December session can overturn the status, scenario and recommendation sections.
NOW WHAT: Read every date here as of 30 October 2026 and re-check the signposts in the scenarios section before acting.
1.3 Evidence base and limits
FINDING: No primary IMO document was read, so every design figure rests on law-firm, classification-society, think-tank and press summaries.
SO WHAT: The numbers are good enough to frame a decision but not to fix a contract price.
NOW WHAT: Check any figure that drives a commitment against the IMO text, and read the research limitations in the references section first.
2. Macro Context & Strategic Drivers
Direct answer
The IMO Net-Zero Framework is an approved draft, not adopted law. MEPC 83 approved it on 11 April 2025, the 17 October 2025 session adjourned adoption by one year, and MEPC 84 (27 April–1 May 2026) set no timeline. ISWG-GHG 22 (1–4 September 2026) ended without agreement. The next dates are ISWG-GHG 23 (23–27 November), MEPC 85 from 30 November and a possible resumed session on 4 December 2026.
2.1 Where the framework stands
FINDING: MEPC 83 approved the draft on 11 April 2025, a 57 to 49 vote adjourned adoption on 17 October 2025, and the framework has not been put to an adoption vote since (DNV; Maritime Executive).
SO WHAT: No count of states voting for adoption exists, so the negotiating arithmetic is untested.
NOW WHAT: Follow the 23 November–4 December 2026 meetings as the first real test of whether a text can reach adoption.
IMO Secretary-General Arsenio Dominguez said at a London press conference reported on 23 January 2026: "I reiterate my call to industry that the decarbonisation has started." MEPC 84 then closed with no design decisions, two further intersessional meetings and no timeline for approval or adoption (DNV, 4 May 2026).
Date | Event | Status | Source |
11 Apr 2025 | MEPC 83 approves the draft | Draft approved | Sidley |
17 Oct 2025 | Extraordinary session votes 57–49 to adjourn by one year | Adjourned | DNV; Maritime Executive |
27 Apr–1 May 2026 | MEPC 84: no design decisions, two more intersessional meetings | No outcome | DNV; Lloyd's Register |
1–4 Sep 2026 | ISWG-GHG 22, London: no agreement | No outcome | UCL; Maritime Executive |
21 Oct 2026 | Japan submits a proposal to remove the Fund for MEPC 85 | Proposal | Cyprus Shipping News |
23–27 Nov 2026 | ISWG-GHG 23 | Scheduled | Maritime Executive; Engine |
From 30 Nov 2026 | MEPC 85; sources give a closing day of 3 or 4 December | Scheduled; date conflict | Lloyd's Register; Engine; Maritime Executive |
4 Dec 2026 | Possible resumed extraordinary session, only if MEPC 85 produces conclusions | Conditional | Maritime Executive; Engine |
Oct 2027 | MEPC 86, the fallback | Scheduled | DNV |
2.2 What the approved draft would require
FINDING: The draft sets a base target of 4% (2028) rising to 30% (2035), a direct compliance target of 17% rising to 43%, and remedial unit prices of USD 100 and USD 380 to 2030 [DRAFT].
SO WHAT: The price signal is fixed for only three compliance years, and annual targets for 2029–2034 are unpublished.
NOW WHAT: Model the 2028–2030 window on the fixed prices and mark every later year as undefined until the text is final.
All values below come from secondary sources (Sidley, 29 April 2025; Carbon Brief, 5 May 2026), with the draft's text itself unread.
Item | Value | Label |
Scope | Ships over 5,000 GT, about 85% of sector emissions | DRAFT |
Measure | Well-to-wake greenhouse gas fuel intensity (GFI) against a 93.3 gCO2e/MJ baseline (2008) | DRAFT |
Base target | 4% in 2028 to 30% in 2035 | DRAFT |
Direct compliance target | 17% in 2028 to 43% in 2035 | DRAFT |
Tier 1 remedial unit | USD 100 per tCO2e on a direct compliance shortfall, to 2030 | DRAFT |
Tier 2 remedial unit | USD 380 per tCO2e on a base target shortfall, to 2030 | DRAFT |
Surplus units | Earned by beating the direct compliance target; valid two years | DRAFT |
Reward | For GFI below 19 gCO2e/MJ (below 14 from 2035); amount not set | DRAFT |
Fund revenue | USD 10–15bn a year in early years (IDDRI, via Carbon Brief); USD 11–12bn (UMAS); USD 11–13bn (Columbia CGEP) | MODELLED |
Not published | Annual targets 2029–2034; reward amounts; prices after 2030 | None found |
2.3 Who wants what
FINDING: At ISWG-GHG 22, 38 countries backed a carbon price and revenue mechanism and 17, mostly oil producers, opposed (gCaptain, 4 September 2026), while a late MEPC 84 attempt to drop pricing and the Fund drew only 24 states (Carbon Brief, 5 May 2026).
SO WHAT: Majorities exist for pricing, but the proposals on the table would change what shipowners pay and who controls the money.
NOW WHAT: Read each amendment by its effect on the USD 100 and USD 380 prices and on the Fund, not by its sponsor's label.
International Chamber of Shipping Secretary General Thomas A. Kazakos stated on 3 May 2026:
"It is vital that governments move towards adoption of a comprehensive fit-for-purpose global framework".
That industry request sits against the amendments below, and no country-by-country roll call exists for any vote.
Proponent | Position or proposal | Label |
Brazil | Cut the GFI by 3% in 2029 and 4% in 2030; keep USD 100 and USD 380 | PROPOSAL |
Tuvalu | Tier 1 at USD 300, Tier 2 at USD 380 | PROPOSAL |
Liberia | Tie the GFI to fuel availability; largely replace the Fund with tradable Surplus Units | PROPOSAL |
Japan | Remove the Fund; rely on surplus units and direct industry contributions | PROPOSAL |
China | Technology-neutral wording; net remedial unit and reward payments in one transaction | PROPOSAL |
Australia, Canada, South Africa, UK | Largely retain the text; add Fund governance detail | PROPOSAL |
Norway | Rejects Liberia's link between the GFI and fuel supply | Position |
Saudi Arabia | Lead opponent | Position |
United States | Told MEPC 84 to end consideration of the framework; remains in talks and supports removing mandatory financial elements (S&P Global, 13 Oct 2026) | Position |
Argentina, Liberia, Panama | Remove carbon pricing and the Fund; claim USD 300bn of penalties by 2035 (their claim) | Interested-party claim |
2.4 Regional regimes already fixed
FINDING: EU ETS maritime surrender rose from 40% of 2024 emissions to 70% of 2025 and reaches 100% of 2026 emissions, with 100% of intra-EU voyages and 50% of EU–non-EU voyages covered [ADOPTED] (Hapag-Lloyd, November 2025).
SO WHAT: A ship calling at EU ports carries these costs in every scenario, and the EUA settled near EUR 88.3 on 12 October 2026 (GMK Center).
NOW WHAT: Keep the EU and UK layers in the budget as fixed lines and model the IMO layer separately.
FuelEU Maritime has applied in full since 1 January 2025 [ADOPTED]; see the FuelEU Maritime compliance cost report for penalty economics.
UK ETS maritime began on 1 July 2026 under SI 2026/392 for domestic voyages of 5,000 GT and above and in-port emissions; offshore ships join on 1 January 2027, the first annual report is due 31 March 2027 and the first surrender is 30 April 2028 [ADOPTED] (DNV; Skuld).
A consultation proposed adding international voyages from 2028 with a 50% surrender share, and no government response was found [PROPOSAL] (Clyde & Co, February 2026).
US Section 301 port fees on China-linked ships are a separate measure and not part of the framework; the current suspension expires 9 November 2026 and an extension to 9 January 2027 is proposed [PROPOSAL] (gCaptain).
3. India-Specific Analysis
Direct answer
India matters to the IMO Net-Zero Framework through its votes, its ports and its exporters. India supported the draft at MEPC 83, backed a one-year postponement at the October 2025 session, and asked at ISWG-GHG 22 for an initial preparatory period. Deendayal Port has reached port readiness level 6 for biomethanol bunkering. No verified estimate of the framework's cost to Indian owners or exporters exists.
3.1 India's exposure and negotiating position
FINDING: India backed the draft at MEPC 83 (Carbon Brief), moved to support a one-year postponement at the October 2025 session alongside China and Argentina (Dialogue Earth), and asked at ISWG-GHG 22 in September 2026 for an initial preparatory period (Engine, 11 September 2026).
SO WHAT: India's request for a preparatory period is on record, but the sources do not say what it would change in compliance dates or costs, and India's recorded vote on 17 October 2025 and any 2026 delegation statement were not found.
NOW WHAT: Watch whether MEPC 85 or the resumed session addresses a preparatory period, and ask the IMO delegation what it would mean for the first compliance year.
Indian-flagged and Indian-owned ships above 5,000 GT on international voyages would fall inside the draft scope [DRAFT]. Voyages between Indian and EU ports fall in the 50% EU ETS category [ADOPTED], so Indian trades with Europe already carry a regional cost (the report's reading of the scope rules). Indian exporters would meet any global charge only through freight rates, and no evidence on pass-through was found.
3.2 Ports and alternative-fuel readiness
FINDING: Deendayal Port reached port readiness level 6 for biomethanol bunkering, V.O. Chidambaranar is advancing a 1,500 m3 green methanol bunkering facility, and Paradip is progressing a hydrogen hub, according to a written reply to Parliament reported on 1 April 2026 (Ship & Bunker).
SO WHAT: India has dated, port-level supply projects, but the documents do not link them to the framework, so they cannot be read as a response to it.
NOW WHAT: Compare any Indian bunkering plan with the only delivered price in the evidence, USD 48.69 per GJ for Singapore methanol in July 2026, because no Indian port price was found.
A Press Information Bureau document of 5 December 2025 lists Kandla, Paradip and Tuticorin as green hydrogen hubs under a National Green Hydrogen Mission target of 5 million tonnes a year by 2030; it does not mention the framework. The Shipping Corporation of India signed a contract with Mazagon Dock Shipbuilders on 20 March 2026 for a 3,000 DWT methanol dual-fuel platform supply vessel, its first to run on green methanol; value and delivery were not disclosed, and the company gave no link to the framework (Hydrocarbon Processing).
Item | Evidence | Source | Date | Link to the framework |
Deendayal Port | Port readiness level 6 for biomethanol bunkering | Ship & Bunker | 1 Apr 2026 | None stated |
V.O. Chidambaranar Port | 1,500 m3 green methanol bunkering facility advancing | Ship & Bunker | 1 Apr 2026 | None stated |
Paradip Port | Hydrogen hub progressing | Ship & Bunker | 1 Apr 2026 | None stated |
Kandla, Paradip, Tuticorin | Green hydrogen hubs; 5 Mt a year target by 2030 | PIB | 5 Dec 2025 | None stated |
Shipping Corporation of India | First green-methanol vessel, 3,000 DWT, Mazagon Dock | Hydrocarbon Processing | 20 Mar 2026 | None stated |
3.3 Indian operators and cost projections
FINDING: No verified estimate of the framework's cost to Indian shipowners, ports or exporters was found, and no analysis of EU ETS or carbon border exposure for Indian trades from CEEW, CSEP or TERI was found.
SO WHAT: An Indian board cannot take a published number for its own exposure, and any figure quoted in the market needs its source and date checked.
NOW WHAT: Build an internal estimate from fuel burn, EU voyage share and the 50% and 100% EU ETS coverage rules, using the tanker example in the scenarios section as the template.
None of the inputs an Indian operator needs (fuel burn, EU and UK voyage share, fuel GFI) is held in the evidence for any named Indian company.
3.4 What each scenario means for India
FINDING: Under adoption, Fund eligibility for Indian owners is not determinable from the evidence; under delay, the port programmes above are not tied to the framework in the documents, so nothing in them depends on timing; under failure, the EU ETS still prices Indian–EU voyages at 50%.
SO WHAT: India's exposure is clearest where regional rules already apply, and unclear where the Fund would decide who gains.
NOW WHAT: Track the Fund proposals from Japan and Liberia, since they decide whether developing-country owners receive revenue or only pay.
The exposure of Indian exports to carbon border measures is not determinable from the evidence reviewed.
4. Operational / Technical Deep-Dive
Direct answer
The draft framework charges a ship through its well-to-wake greenhouse gas fuel intensity (GFI). A ship that misses the direct compliance target pays Tier 1 at USD 100 per tCO2e, and a ship that misses the base target pays Tier 2 at USD 380; beating the direct compliance target earns surplus units [DRAFT]. Route economics conflict between studies, and the EU ETS and FuelEU Maritime add separate costs that the IMO outcome does not remove.
4.1 How the GFI, remedial units and surplus units work
FINDING: A ship's GFI is tested against two targets, and a shortfall against the direct compliance target costs USD 100 per tCO2e while a shortfall against the base target costs USD 380 [DRAFT] (Sidley).
SO WHAT: The tanker example in the scenarios section sums direct compliance and base penalties for one ship, so a ship below both targets appears to pay both.
NOW WHAT: Calculate a ship's GFI position against both targets before comparing any fuel choice.
Surplus units are earned by beating the direct compliance target. They can be banked for the same ship, sold to cover a base target gap, or cancelled to the Fund, and each is valid for two years [DRAFT]. One research note labelled the two targets the opposite way round, so this report follows Sidley's labelling, and the primary text should settle it.
F1. How a draft framework bill is built [DRAFT]
4.2 Compliance routes compared
FINDING: Under a low gas price assumption, UMAS found LNG dual-fuel the cheapest route in each year from 2028 to 2030, with methanol dual-fuel and conventional ships with onboard carbon capture the two dearest [SINGLE-SOURCE].
SO WHAT: A joint GCMD and BCG study found the opposite for carbon capture, so the ranking depends on the model.
NOW WHAT: Test each route in your own fleet model at both USD 380 and a higher carbon price before treating either study as the answer.
UMAS (University College London, May 2025) is the only like-for-like total-cost comparison found, and its year-by-year values were read from chart labels, so this report gives the ranking and not the figures. The GCMD and BCG study, reported by gCaptain on 17 September 2026, finds conventional fuel oil with onboard carbon capture cheapest through mid-century at USD 380 per tCO2e, with the balance tipping towards methanol, ammonia and ethanol around USD 700 (secondary report; primary study not located) [SINGLE-SOURCE]. The two studies disagree on carbon capture and agree that methanol and e-fuels are not cheapest at USD 380. The models' fuel-price and carbon-capture assumptions are not held in the evidence, so the conflict cannot be settled here.
For the fuel-choice decision itself, see the green methanol versus green ammonia investment guide, and for the case that LNG ships become stranded assets, see the LNG transition fuel analysis.
4.3 The fuel price gap
FINDING: Singapore delivered prices averaged USD 18.66 per GJ for 0.5% fuel oil, USD 20.05 for LNG, USD 22.72 for B24 bioblend and USD 48.69 for sustainable methanol in July 2026, about 2.6 times fuel oil for methanol [SINGLE-SOURCE] (S&P Global via Hellenic Shipping News).
SO WHAT: The premium explains why owners ordering ships in 2026 favoured LNG-capable designs over methanol.
NOW WHAT: Use the Singapore ratio as a warning for any methanol budget, but price your own bunkering port, since this is one port and one month.
Singapore delivered fuel prices, July 2026, USD per GJ
August 2026 prices moved little: VLSFO at USD 20.15 per GJ and methanol at USD 48.54, a ratio of about 2.4 times [ANALYST ARITHMETIC]. LNG sat about 7% above fuel oil in July and B24 about 22% above.
For supply readiness, see the port-by-port ammonia bunkering assessment and the green shipping fuels investment report.
Three ammonia prices exist, and each has a different basis, so they are shown separately and never combined. No independent delivered green-ammonia price series for 2026 was found.
Figure | Stated basis | Source | Date |
USD 2,830 per tonne | VLSFO-equivalent, NW Europe spot, green ammonia | Argus | April 2025 prices, published 7 May 2025 |
USD 885–1,050 per ton | Basis not stated; described as two to four times VLSFO after energy-density adjustment | Columbia CGEP | October 2025 |
USD 710 per tonne | Price used by WinGD and Envision Energy at Envision's Jinzhou facility; a study price, not a market assessment | gCaptain | 17 September 2026 |
4.4 Newbuild premium and orderbook
FINDING: Pacific Basin's own contract prices imply a dual-fuel premium of about USD 6.2 million on a USD 39.2 million conventional Ultramax, about 16% [ANALYST ARITHMETIC].
SO WHAT: Owners now judge that premium against an unsettled rule, and the orderbook shows which way they lean.
NOW WHAT: Price the dual-fuel premium per ship in your own order before the next decision date, using the 16% figure only as a cross-check across different ship types.
Clarksons recorded that 37% of tonnage ordered in 2025 was alternative-fuel capable, down from 45% in 2024, and that 47% of orderbook gross tonnage was alternative-fuel capable on 1 January 2026, against about 9% of the in-service fleet by gross tonnage (Seatrade Maritime; Riviera). DNV counted 137 alternative-fuel orders in the first half of 2026, with LNG at 73, LPG at 55, ammonia at 4, methanol at 2 and hydrogen at 1 (Argus, 2 July 2026).
V4. Alternative-fuel orders by fuel, first half 2025 and first half 2026
4.5 IMO, FuelEU Maritime and EU ETS: what overlaps and what adds
FINDING: The draft framework prices only emissions above targets, in two tiers at fixed prices to 2030, while the EU ETS prices all covered emissions at the market allowance price and FuelEU Maritime sets a fuel-intensity limit with penalties and pooling.
SO WHAT: Lloyd's Register warns of double compliance and double cost under the two regimes, and no agreed method exists, so overlap is a cost risk and not a settled offset.
NOW WHAT: Budget all three layers separately, and expect the Commission's report on alignment within 18 months of any adoption (Hill Dickinson).
European Commissioner Apostolos Tzitzikostas, Commissioner for Sustainable Transport and Tourism, stated on 2 June 2026 at the opening of Posidonia 2026 in Athens:
"European companies will not pay twice, both in Europe and in the IMO".
That is a political pledge. The Commission's proposal of 17 July 2026 (COM(2026) 616) turns it into a review clause, and the part of the text that was read contained no suspension [PROPOSAL]. At face value the Tier 2 price of USD 380 is about 3.8 times an EU allowance near EUR 86–88 (about USD 100, conversion approximate), but the framework price applies only above the targets, so the ratio overstates exposure [ANALYST ARITHMETIC].
For the demand side of renewable fuels, see the RED III RFNBO targets report.
Item | IMO Net-Zero Framework (draft) | EU ETS maritime | FuelEU Maritime |
Status | DRAFT, not adopted | ADOPTED | ADOPTED |
Mechanism | GFI above two targets pays remedial units | Allowances for all covered emissions | Fuel-intensity limit with penalties and pooling |
Scope | Ships over 5,000 GT, international voyages | 100% intra-EU voyages; 50% EU–non-EU voyages | Voyages to and from EU ports, in full since 1 Jan 2025 |
Price basis | USD 100 and USD 380 per tCO2e to 2030 | Market allowance price, EUR 88.3 on 12 Oct 2026 | Penalty per tonne; pooling price |
Effect of IMO delay | Start moves later | None | None |
5. Named Company Case Studies
Direct answer
Shipping companies are responding to the uncertainty by changing what they order, not by stopping. Pacific Basin cancelled four methanol dual-fuel Ultramaxes in April 2026 and cited the October 2025 failure to adopt the framework. Maersk kept ordering large dual-fuel container ships without linking them to the IMO. The Shipping Corporation of India contracted its first green-methanol vessel. Pacific Basin's contract prices fell from USD 181.6 million to USD 156.8 million.
5.1 Pacific Basin (Hong Kong)
FINDING: On 16 April 2026 Pacific Basin converted four 64,000 dwt methanol dual-fuel Ultramaxes ordered at Nihon Shipyard through Mitsui & Co into conventional ships, cutting the price per ship from USD 45.4 million to USD 39.2 million and the total from USD 181.6 million to USD 156.8 million, with delivery moving to 2028 and mid-2029.
SO WHAT: It is the one decision in the evidence that a company attributes to the failure to adopt the framework, citing renewed uncertainty about the timing and final shape of a global regulatory framework.
NOW WHAT: Read the cancellation as a signal about the premium and timing, not as a withdrawal from methanol, because the company kept an option on two methanol dual-fuel Ultramaxes at USD 45.5 million each, exercisable by February 2027.
Chief Executive Martin Fruergaard's company announcement of 16 April 2026 said it would
"avoid near-term investment in higher-cost dual-fuel vessels until clearer regulatory support emerges".
The company still expects an NZF-type global mechanism to be adopted in some form in due course (MarketScreener; Maritime Executive, 17 April 2026). The premium it chose not to pay is about USD 6.2 million per ship [ANALYST ARITHMETIC].
Company | Action | Figure | Date | Stated link to the framework |
Pacific Basin | Cancelled four methanol dual-fuel Ultramaxes | USD 181.6m to USD 156.8m | 16 Apr 2026 | Yes, in the announcement |
Maersk | Ordered 8, then 26 dual-fuel container ships of 18,600 TEU | 8 and 26 ships | 9 Feb and 18 Sep 2026 | None in the sources |
Mitsui O.S.K. Lines | Ordered four ammonia dual-fuel Newcastlemaxes | 4 ships, 210,000 dwt | Dec 2024 | Before the vote |
Shipping Corporation of India | Contracted first green-methanol vessel | 3,000 DWT | 20 Mar 2026 | None in the sources |
5.2 Maersk (Denmark)
FINDING: Maersk ordered eight 18,600 TEU dual-fuel container ships from New Times Shipbuilding on 9 February 2026, for delivery in 2029 and 2030, running on conventional bunker fuel or liquefied gas, and confirmed 26 more of the same size on 18 September 2026 (Maersk; WorldCargo News).
SO WHAT: A large container carrier kept investing in flexible ships in the same year Pacific Basin retreated, but neither source mentions the IMO, so no framework effect can be inferred.
NOW WHAT: Treat Maersk as evidence of segment behaviour, not of a position on the framework, because no Maersk executive statement on it was verified in the period.
WorldCargo News reports the September order as dual-fuel ships able to run on liquefied gas; the yards and contract value were not disclosed.
5.3 Mitsui O.S.K. Lines (Japan)
FINDING: Mitsui O.S.K. Lines ordered four 210,000 dwt ammonia dual-fuel Newcastlemaxes at CSSC Qingdao Beihai in December 2024, for delivery in 2027–2028 (India Sea Trade News).
SO WHAT: The order predates the October 2025 vote, so it shows the company's earlier strategy and not a response to the adjournment.
NOW WHAT: Leave Mitsui O.S.K. Lines unclassified for post-vote behaviour until a dated statement is available.
5.4 Shipping Corporation of India
FINDING: The Shipping Corporation of India and Mazagon Dock Shipbuilders signed a contract on 20 March 2026 for one 3,000 DWT methanol dual-fuel diesel-electric platform supply vessel, built to Indian Register of Shipping rules (Hydrocarbon Processing).
SO WHAT: It is the first vessel in the company's fleet to run on green methanol, but its value, delivery date and any link to the framework were not disclosed.
NOW WHAT: Read it as early Indian state-owned fleet action, and not as a cost signal.
5.5 Industry order behaviour and Hapag-Lloyd
FINDING: Methanol orders fell to 2 in the first half of 2026 from 40 a year earlier while LNG stayed dominant at 73 of 137 (Argus; DNV).
SO WHAT: Argus said the IMO uncertainty "may have contributed", which is not proof, and Riviera also cites limited supply and high biomethanol and e-methanol prices.
NOW WHAT: Separate the effect of the rule from the effect of fuel price when reading any order statistic.
Hapag-Lloyd expected its EU ETS surcharge to rise by about 45% for 2026, with no per-TEU amount published. A joint statement signed by 87 maritime firms, including Pacific Basin, X-Press Feeders, Klaveness Combination Carriers, SamSkip and J. Lauritzen, urged adoption in 2026; the source gives no calendar date (Ship & Bunker).
5.6 What company exposure can and cannot be quantified
FINDING: No company has disclosed a framework cost, and no cost for the adopted, delayed or failed scenarios from a named independent source was found.
SO WHAT: Modelled third-party estimates for individual carriers were not part of the verified evidence, so none appears here and none should be read as a liability.
NOW WHAT: To model a named company, collect its fuel burn by year, its EU and UK voyage share, its allowance and fuel price series, its GFI by vessel and its surplus-unit position.
6. Friction, Risk & Systemic Bottlenecks
Direct answer
The biggest unresolved issue is who collects and spends the money. The Fund, financed by Tier 1 and Tier 2 payments, is contested, and Japan has proposed removing it. Two further gaps sit behind it: no source settles whether a materially amended text can be adopted at a resumed session, and the EU's offset for double payment is a review clause, not an offset. Until these settle, no firm cost forecast is possible.
6.1 The critical unresolved issue: who collects and spends the money
FINDING: The Fund is financed by Tier 1 and Tier 2 payments and is meant to pay for low-emission fuel incentives and revenue for developing countries, especially least developed countries and small island states [DRAFT] (Sidley).
SO WHAT: Whoever controls that revenue decides who pays, how much and to whom, so every cost figure in this report depends on the answer.
NOW WHAT: Read the 4 December 2026 outcome first for what happens to the Fund, and only then for the targets.
Japan submitted a proposal on 21 October 2026 to remove the Fund and rely on surplus units and direct industry contributions to approved projects; critics say it would move control of the revenue from collective governance to private actors (Cyprus Shipping News). Liberia questions the Fund's legality, cost and complexity and would largely replace it with tradable Surplus Units. Brazil, the Democratic Republic of the Congo, Kenya, the Solomon Islands and Tuvalu proposed collection and disbursement rules (gCaptain, 28 August 2026), yet Maritime Executive reported on 4 September 2026 that opposition to the Fund remains strong even after a renaming.
Counterweights exist. UCL's tally had 38 states favouring a fund or similar mechanism against 17 for technical measures only (Engine), and the 24 states that backed the late MEPC 84 attempt to drop pricing fell well short of a majority. One source suggests the Fund could be separated and taken to MEPC 86 (Seatrade, 1 May 2026) [SINGLE-SOURCE].
If the Fund is removed or replaced by surplus-unit trading, the USD 100 and USD 380 prices, fixed only to 2030, may not survive. Tuvalu proposes USD 300 for Tier 1, and prices after 2030 are undefined. The cost of adoption cannot be stated until the money mechanism settles.
6.2 The procedural and EU alignment gaps
FINDING: No source read settles whether a materially amended text can be adopted at the resumed extraordinary session without a new circulation and approval cycle.
SO WHAT: If a new cycle is needed, adoption on 4 December 2026 would not hold, and the entry-into-force dates in the scenarios section move back.
NOW WHAT: Ask your regulatory adviser which path applies before relying on any entry-into-force date.
How 2028, the first compliance year in the original text, is treated if entry into force falls in spring 2028 was also not found. The Commission must report within 18 months of adoption on alignment with EU rules, and the July 2026 proposal frames the answer as a review clause, not a suspension [PROPOSAL]. Until an IMO text is adopted, in force and reviewed, EU costs apply in full and framework costs would be added without an agreed offset. This is the difference between postponement and non-adoption: a delay shifts the global layer later, while failure removes it and leaves the regional layer unchanged.
6.3 Veto points and the United States
FINDING: Tacit acceptance can be blocked by one third of Parties or by Parties holding at least 50% of world tonnage (IMO FAQ).
SO WHAT: The United States threatened visa limits, sanctions and port fees against supporting states before the October 2025 vote, but no enacted framework-linked penalty was found.
NOW WHAT: Watch the flag states whose tonnage could reach the 50% threshold, since that is where an objection would be counted.
The US submission to MEPC 84, reported by Carbon Brief on 5 May 2026, said:
"The most appropriate path forward is to end consideration of the IMO net-zero framework entirely."
By 13 October 2026, S&P Global reported that the US remained in the talks and supported revisions that remove mandatory financial elements. This report's own reading, not a source finding, is that the US cannot block adoption alone at the committee, and that its levers are bilateral and the tonnage-based objection route.
6.4 Other friction
FINDING: Sustainable methanol cost about 2.6 times fuel oil per GJ in Singapore, and a BCG survey of 125 logistics executives found willingness to pay for green-fuel shipping fell to 3% in 2025 from 4.5% in 2024 (S&P Global).
SO WHAT: A wide price gap and a falling premium that cargo owners will accept leave owners holding the cost.
NOW WHAT: Test cargo-owner willingness to pay before assuming any cost can be passed on.
Melina Travlos, President of the Union of Greek Shipowners, stated on 16 April 2026:
"We remain firmly committed to the decarbonisation of our sector. However, ambition must be grounded in realism."
The Commission proposes extending EU ETS to general cargo and offshore ships of 400–5,000 GT from 2031 [PROPOSAL], and the UK may add international voyages from 2028 [PROPOSAL]. No global clean-fuel supply-gap figure was found.
6.5 What the sources leave unresolved
FINDING: Source conflicts on the MEPC 85 closing day, the 38 to 17 count, the DNV order totals, the ammonia prices and the carbon-capture rankings affect numbers in this report and remain open.
SO WHAT: They include the closing day of MEPC 85 (3 or 4 December), how the 38 to 17 count is worded, the two DNV order totals (236 summed against 242 reported), the three ammonia prices, and the UMAS and GCMD/BCG carbon-capture rankings.
NOW WHAT: Check the first two against the IMO meetings page before the report informs any dated commitment.
7. Capital & Investment Implications
Direct answer
The IMO outcome changes fleet and fuel decisions mainly through timing. Methanol orders fell to 2 in the first half of 2026 from 40, LNG-capable orders led at 73 of 137, and Pacific Basin's own prices imply a dual-fuel premium of about 16% [ANALYST ARITHMETIC]. The decision dates that matter are the possible session on 4 December 2026, Pacific Basin's option deadline in February 2027 and MEPC 86 in October 2027.
7.1 Order signals and capital behaviour
FINDING: DNV counted 137 alternative-fuel orders in the first half of 2026 with methanol at 2 and LNG at 73, and 242 orders in January–August 2026, up 27% year on year, as reported separately (gCaptain; LNG Industry).
SO WHAT: The two DNV figures do not add up cleanly, since the first half plus July (47) and August (52) gives 236, so the totals should be cited as reported and not combined.
NOW WHAT: Use the order data to read direction, and request DNV's underlying series before using it in a model.
LNG made up 63% of 2026 orders to August, 59% of them containerships and 30% car carriers. Clarksons reported 47% of orderbook gross tonnage as alternative-fuel capable on 1 January 2026, so the fleet that is being built is far more capable than the fleet in service.
For the investment flows behind these orders, see the green molecules economy outlook.
7.2 Cost pass-through and freight
FINDING: The only pass-through evidence found is the BCG survey (3% willingness to pay in 2025, 4.5% in 2024) and Hapag-Lloyd's expected rise of about 45% in its EU ETS surcharge for 2026.
SO WHAT: Carriers are passing regional costs on through surcharges, but no evidence shows whether charterers or cargo owners accept a framework cost.
NOW WHAT: Treat pass-through as untested in any scenario and test it in your own contracts.
7.3 The Executive Decision Screen
FINDING: The screen takes four inputs, which are EU and UK trade exposure, the decision at hand, a working view of the IMO outcome and the ship segment, and returns a decision posture with the date that would change it.
SO WHAT: It screens decisions and does not calculate cost, because the evidence holds no fuel burn, voyage share or price series to power a calculator.
NOW WHAT: Run the screen for each open commitment and record the trigger date it returns.
Five rules apply. They are structured analyst judgement, and several rest on single-source figures.
1. If EU and UK exposure is high under any outcome, proceed on regional economics and treat the framework as an addition, because EU ETS and FuelEU costs do not depend on the IMO outcome and the framework adds no cost in 2027.
2. For a newbuild with low or no EU and UK exposure and an outcome of delay or failure, hold with an option to a dated trigger, the approach Pacific Basin took.
3. For a newbuild with a methanol or ammonia path and an outcome of failure, defer to a dated trigger and re-test the premium, given the fuel price gap of about 2.6 times, methanol orders of 2 against 40 and a derived premium near 16%.
4. For a container ship or car carrier newbuild under any outcome, commit with fuel flexibility and test it in your own model, since LNG-capable designs dominate those segments (DNV).
5. For a fuel procurement contract if the framework is adopted, contract with review points at the 2028 start, because prices are fixed only to 2030 and the treatment of 2028 is unknown.
F2. Executive Decision Screen: four inputs, one posture
Methodology note. The screen applies a small set of rules to four reader inputs: EU and UK trade exposure, the decision at hand, the reader's view of the IMO outcome, and ship segment. Its output is a decision posture with a rationale and the dated triggers that would change it. The rules are structured analyst judgement. The criteria are: whether the regional costs apply regardless of the IMO outcome; whether the decision is reversible or carries an option; how far the fuel premium observed in Singapore in July 2026 is covered by the reader's own EU exposure; and how recent order behaviour in the same segment compares. The screen does not calculate cost, assigns no weights or scores, and rests on evidence that includes single-source figures, each of which the rationale names.
7.4 Option timing against the decision calendar
FINDING: Pacific Basin's option on two methanol dual-fuel Ultramaxes at USD 45.5 million each must be exercised by February 2027, about two months after a possible 4 December 2026 adoption and eight months before MEPC 86 in October 2027 (Riviera, 8 July 2026).
SO WHAT: The option deadline falls before any fallback decision, so the owner must decide on limited information, which is this report's reading.
NOW WHAT: Map your own contract deadlines against the 4 December 2026 and October 2027 dates before they arrive.
8. Future Scenarios & Forecast (2026–2035)
Direct answer
The framework adds no cost in 2027 under adoption, delay or failure. Adoption at a resumed session, possibly on 4 December 2026, would bring entry into force around March–April 2028 [ANALYST ARITHMETIC]. Adoption at MEPC 86 in October 2027 would mean around February 2029. Without adoption there is no global charge, and EU ETS and FuelEU Maritime remain binding. Framework costs for 2028–2030 cannot be quantified from verified data.
8.1 The Scenario Exposure Matrix, 2027–2030
FINDING: The framework adds no cost in 2027 under any scenario, and the only layer that moves between scenarios is the global one [ANALYST ARITHMETIC].
SO WHAT: A board can fix its regional budget now and treat the global layer as the variable.
NOW WHAT: Use the matrix to see which cells need a decision date and which cannot be filled from verified data.
Item | A: Adoption at resumed session | B: Delay to MEPC 86 | C: Failure |
Trigger | Adopted at the session on 4 Dec 2026 or later, if MEPC 85 produces conclusions | Adopted at MEPC 86 in Oct 2027 | No adoption; talks collapse or a text without pricing replaces it |
Earliest entry into force [ANALYST ARITHMETIC] | Around Mar–Apr 2028 | Around Feb 2029 | None |
Framework cost, 2027 | None | None | None |
Framework cost, 2028 | Not quantifiable from verified data; treatment of 2028 not found | None | None |
Framework cost, 2029–2030 | Not quantifiable from verified data; annual targets unpublished | Not quantifiable from verified data | None |
EU and UK exposure | Unchanged until the Commission review | Unchanged, for longer | Unchanged; EU ETS and FuelEU remain binding |
Fixed in all scenarios | 100% EU ETS surrender of 2026 emissions; FuelEU penalties; UK ETS first surrender on 30 Apr 2028 | Same | Same |
Methodology note. The matrix compares three outcomes: adoption at the resumed extraordinary session, which may take place on 4 December 2026; adoption at MEPC 86 in October 2027; and no adoption. Entry-into-force timing is calculated from the reported mechanics of the tacit acceptance procedure, a minimum of 10 months followed by 6 months, applied to each adoption date. The results are analyst arithmetic, not a forecast, and no source gives a formal scenario analysis. No probability is assigned to any scenario. Each cell is labelled adopted, draft, proposal, modelled or analyst arithmetic. Where annual values, prices or treatment of a compliance year are unpublished, the cell reads "not quantifiable from verified data" and is not estimated. The matrix does not add the IMO, FuelEU and EU ETS costs together, because they differ in scope, price basis and the share of emissions covered.
V1. Entry-into-force timing by scenario [ANALYST ARITHMETIC; not a forecast]
Worked example: a medium-range tanker burning 5,000 tonnes in 2028.
The framework figure comes from a published example (GCMD, via Seatrade Maritime); the EU lines come from a Ship & Bunker analysis of 2026 costs. The fuel quantity of 5,000 tonnes is the sourced example's quantity, reused for the EU lines as an illustrative parameter. All inputs are single-source [SINGLE-SOURCE] and the lines are shown side by side, never added.
Worked example — medium-range tanker, 5,000 tonnes of fuel
Line | Input and source | Calculation | Result |
Fuel burned | 5,000 t heavy fuel oil, 2028 example (GCMD, via Seatrade Maritime) — illustrative quantity for the EU lines | n/a | 5,000 t |
Framework charge, original 2028 start [DRAFT] | USD 242,000 direct-compliance penalties plus USD 114,000 base penalties (same source) | 242,000 + 114,000 | USD 356,000 a year; about USD 71 per tonne (356,000 / 5,000) |
EU ETS, all voyages intra-EU, 2026 modelled | USD 314.46 per tonne VLSFO, 100% phase-in (Ship & Bunker analysis) | 5,000 × 314.46 | USD 1,572,300 |
EU ETS, all voyages EU to non-EU | About half the intra-EU figure (same analysis) | 1,572,300 / 2 | USD 786,150 |
FuelEU Maritime, 2026 modelled | USD 50.48 per tonne penalty or USD 16.91 per tonne pooling (same analysis) | Not scaled: no sourced EU energy share | Per tonne only |
Methodology note. The example multiplies sourced per-tonne figures by a single fuel quantity of 5,000 tonnes. The framework figure comes from a published worked example for 2028; the EU ETS and FuelEU figures come from a Ship & Bunker analysis of 2026 costs. Each input is single-source. The fuel types differ (heavy fuel oil and VLSFO), the framework charge assumes the original 2028 start, and the EU analysis assumes an average allowance price of about EUR 86. The lines are shown side by side and are not summed. The example does not describe any named company or vessel and is not a cost forecast.
To apply it, replace 5,000 tonnes with your ship's annual fuel burn, multiply by the per-tonne figure for the regime that applies, and halve the EU ETS figure for voyages between EU and non-EU ports.
8.2 Scenario A: adoption
FINDING: Adoption at the resumed session would start the framework around March–April 2028, with targets of 4% (base) and 17% (direct compliance) and prices of USD 100 and USD 380 starting in a year that begins before entry into force [ANALYST ARITHMETIC].
SO WHAT: How 2028 is treated is not stated anywhere in the evidence, so targets may shift or soften.
NOW WHAT: Plan the earliest case but hold 2028 framework charges as unquantified until the treatment is published.
Brazil's option would soften the GFI by 3% in 2029 and 4% in 2030 with unchanged prices. EU and UK costs stay unchanged until the Commission review, due within 18 months of adoption.
8.3 Scenario B: delay
FINDING: Adoption at MEPC 86 in October 2027 would mean entry into force around February 2029, shortening the fixed price window to 2030 to about two years [ANALYST ARITHMETIC].
SO WHAT: Whether the USD 100 and USD 380 prices hold for such a short window is not stated, and UCL expects efforts to soften the initial GFI pathway.
NOW WHAT: Keep fuel and ship commitments flexible until the 2027 decision, and assume prices could change.
30 states are open to easing targets for 2029–35 (Engine).
Fotios Katsoulas, Research Director for Alternative Fuels at S&P Global Energy Horizons, was reported on 1 October 2026 as saying:
"The most likely outcome is not a reversal of decarbonization targets but rather a slower transition pathway."
Dorota Lost-Sieminska, Director of the Legal Affairs and External Relations Division at the IMO, was reported on 13 October 2026 as saying:
"So I strongly believe that we will find a solution, a compromise."
8.4 Scenario C: failure
FINDING: Without adoption there is no global charge, and EU ETS and FuelEU Maritime remain the binding regimes.
SO WHAT: The regional layer would carry the whole compliance cost, and the 2023 IMO greenhouse gas strategy goals would remain without a measure, which is this report's own statement and not a source finding.
NOW WHAT: Do not budget a framework credit against EU costs in this case, since none is available.
Pacific Basin still expects an NZF-type global mechanism to be adopted in some form in due course, according to its announcement of 16 April 2026. BIMCO stated on 10 September 2026:
"Negotiations will continue into 2027 and with time, consensus may prevail."
Both are counter-signals to the failure case.
8.5 Beyond 2030 to 2035
FINDING: The draft targets reach 30% (base) and 43% (direct compliance) in 2035, and prices after 2030 are undefined [DRAFT].
SO WHAT: Any 2035 cost figure rests on assumptions the draft does not fix, and none is offered here.
NOW WHAT: Treat claims about 2035 costs as interested-party or single-source figures and ask for their assumptions.
Columbia CGEP's case for a mid-size carrier on VLSFO in 2035 shows added annual expense of more than USD 1.5 million, or 17–20% of fuel cost, with vessel size and fuel price not stated [SINGLE-SOURCE]. The Commission proposes derogations extended to 2035 and a reserve of up to 110 million allowances, valued at about EUR 15 billion, running to 2040 [PROPOSAL]. Argentina, Liberia and Panama claim USD 300 billion of penalties by 2035, a claim this report could not verify. A related carbon-price question in aviation is covered in the CORSIA eligible emissions units report.
8.6 Signposts
FINDING: Nine dated events between 9 November 2026 and 30 April 2028 will move this analysis.
SO WHAT: Each one changes a specific cell in the matrix, so a board can assign an owner to each.
NOW WHAT: Set a review for each date below.
Date | Event | What it changes |
9 Nov 2026 | US port-fee suspension expires; extension to 9 Jan 2027 proposed | US port fees on China-linked ships (not the framework) |
23–27 Nov 2026 | ISWG-GHG 23 | Text for MEPC 85 |
From 30 Nov 2026 | MEPC 85 | Whether a resumed session is called |
4 Dec 2026 | Possible resumed extraordinary session | Scenario A or B |
Q1 2027 | Target for political agreement on the Commission's July 2026 package [PROPOSAL] | EU review clause and extension to general cargo and offshore ships of 400–5,000 GT |
Feb 2027 | Pacific Basin option deadline | Methanol dual-fuel ordering signal |
31 Mar 2027 | UK ETS first annual report due | UK cost base |
Oct 2027 | MEPC 86 | Scenario B |
30 Apr 2028 | UK ETS first surrender | UK cost base |
Continue reading part 2; https://www.greenfueljournal.com/post/imo-net-zero-framework-2027-2030-part-ii