The International Maritime Organisation’s Net-Zero Framework represents the most ambitious and comprehensive attempt to regulate greenhouse gas emissions from a global industrial sector.
Agreed in draft form at the 83rd session of the Marine Environment Protection Committee (MEPC 83) in April 2025, the framework operationalises the 2023 IMO Greenhouse Gas Strategy by combining mandatory fuel-intensity standards with a global carbon pricing mechanism. This article provides a detailed technical analysis of the framework, examining its legal architecture, economic instruments, sectoral impacts, and unresolved implementation challenges. It further situates the framework within the current geopolitical landscape, characterised by strong European support, significant Asian industrial investment, and explicit reservations from the United States. Against this background, the article articulates a principled and pragmatic policy position that Ghana should adopt as a developing, import-dependent coastal State and an active participant in the IMO’s multilateral processes.
Introduction
International shipping underpins global trade, carrying over 80 per cent of world merchandise by volume, yet it has historically remained outside binding global climate regimes. The sector’s transboundary nature renders national or regional regulatory approaches inherently limited, raising risks of market distortion and carbon leakage. Consequently, the International Maritime Organisation (IMO), as the United Nations specialised agency responsible for maritime safety, security, and environmental protection, occupies a unique position as the only forum capable of delivering a globally harmonised response to maritime greenhouse gas emissions.
The adoption of the IMO Net-Zero Framework (NZF) marks a paradigm shift in maritime environmental governance. For the first time, international shipping is subject to a global regime that not only mandates progressive emissions reductions but also attaches explicit financial consequences to non-compliance. For Ghana, a climate-vulnerable developing country with high dependence on maritime trade and ambitions to serve as a regional logistics hub, the framework presents a complex mix of opportunities, risks, and strategic considerations. These considerations are further complicated by emerging geopolitical tensions, particularly the withdrawal of United States support for the framework’s economic measures.
The IMO 2023 Greenhouse Gas Strategy as the Normative Foundation
The Net-Zero Framework is anchored in the Revised IMO Greenhouse Gas Strategy adopted in 2023. This strategy established, as a central objective, the achievement of net-zero greenhouse gas emissions from international shipping by or around 2050. Importantly, the strategy moved beyond a sole reliance on relative efficiency improvements and introduced the concept of absolute emissions reduction, thereby aligning the maritime sector more closely with the objectives of the Paris Agreement.
The strategy also identified indicative checkpoints for 2030 and 2040, signaling a clear intention to phase out fossil fuels over time and to incentivize the uptake of zero and near-zero emission technologies. However, until MEPC 83, these ambitions remained largely aspirational. The draft regulations approved at MEPC 83 translate this strategic vision into a concrete, legally binding architecture, thereby bridging the gap between political commitment and regulatory enforcement.
The Net-Zero Framework is designed with a phased timeline intended to balance environmental urgency with economic and technical feasibility. Formal adoption of the regulations was expected in October 2025, with entry into force anticipated in March 2027. The initial years following entry into force are structured as a preparatory phase, during which reporting systems, verification mechanisms, and institutional arrangements will be established.
Mandatory greenhouse gas emissions reporting is expected to commence in 2028, while the financial components of the framework, including levies and reward mechanisms, are projected to become operational from 2029. This staged approach reflects an acknowledgment of the significant adjustments required by shipowners, fuel suppliers, ports, and administrations, particularly in developing countries.
The Net-Zero Framework is built upon two mutually reinforcing regulatory pillars: a Global Fuel Standard and a Global Economic Measure. The Global Fuel Standard addresses the technical dimension of emissions by mandating reductions in the greenhouse gas intensity of marine fuels, while the Global Economic Measure introduces a price signal that internalises the cost of emissions. Together, these instruments are intended to steer both operational behaviour and long-term investment decisions across the maritime value chain.
This dual-pillar architecture is significant because it avoids the limitations of purely technical regulation, which can be slow to drive transformational change, and purely market-based mechanisms, which can be volatile or politically contentious when implemented in isolation.
The Global Fuel Standard requires ships to progressively reduce their Greenhouse Gas Fuel Intensity (GFI), measured on an annual basis. GFI is defined as the quantity of greenhouse gas emissions per unit of transport work and is calculated using a well-to-wake methodology. This lifecycle-based approach captures emissions associated not only with fuel combustion onboard ships but also with fuel production, processing, and distribution.
By adopting a well-to-wake framework, the IMO seeks to prevent perverse incentives that could arise from fuels that appear environmentally benign at the point of use but generate substantial upstream emissions. The standard thus emphasises both fuel choice and fuel sourcing.
The regulatory design incorporates two compliance thresholds: a base target representing the minimum acceptable level of performance, and a more ambitious direct compliance target. This graduated structure introduces flexibility while simultaneously rewarding early and deeper emissions reductions. Over time, the targets become increasingly stringent. By 2030, ships are expected to achieve a 21.5 per cent improvement in efficiency relative to 2019 levels, reflecting an extension of the existing Carbon Intensity Indicator framework. By 2034, fuels classified as zero or near-zero emission must not exceed an intensity threshold of 19 grams of CO₂ equivalent per megajoule, tightening further to 14 grams from 2035 onwards.
Complementing the technical standards, the Global Economic Measure introduces a sector-wide carbon pricing mechanism. Ships whose emissions exceed their applicable GFI targets are required to purchase remedial units, which function as compliance instruments analogous to carbon credits within the maritime sector.
The pricing mechanism is structured into two tiers. Emissions exceeding the base target are subject to a higher levy of USD 380 per tonne of CO₂, while emissions falling between the base target and the direct compliance target incur a lower levy of USD 100 per tonne. This differentiated structure is intended to discourage significant non-compliance while avoiding disproportionate penalties for marginal underperformance.
Conversely, ships that outperform the direct compliance target are rewarded with surplus units. These units are bankable for a limited period and may be transferred within fleets or traded with other operators, thereby introducing a market-based incentive for efficiency, innovation, and early adoption of low-emission technologies.
All revenues generated through the carbon pricing mechanism are to be channeled into a dedicated IMO Net-Zero Fund. The fund is intended to serve multiple objectives, including rewarding ships that deploy zero or near-zero emission technologies, financing research and development, supporting the build-out of alternative fuel infrastructure, and facilitating a just transition for developing countries, including Small Island Developing States and Least Developed Countries.
In addition, the fund is expected to contribute to climate impact mitigation efforts in vulnerable regions. Initial disbursements are anticipated from mid-2029. For countries such as Ghana, the governance, accessibility, and allocation criteria of this fund will be of critical importance in determining whether the framework yields equitable outcomes.
Sectoral Implications for Global Shipping
The impacts of the Net-Zero Framework will vary significantly across shipping segments. Container shipping is expected to adapt relatively rapidly, driven by stronger balance sheets, higher freight rates, and greater exposure to consumer-facing supply chains. A growing proportion of new container vessels are already being ordered with dual-fuel or alternative-fuel capabilities, particularly for liquefied natural gas, methanol, and biofuels. While carbon costs are likely to be passed on to shippers, investments in energy efficiency measures such as hull optimization and propulsion upgrades offer substantial fuel savings with relatively short payback periods.
In contrast, the dry bulk sector faces more acute challenges. The global bulk carrier fleet is comparatively older, margins are thinner, and the technical feasibility of retrofitting vessels for alternative fuels is limited. Estimates suggest that fewer than 10% of existing bulk carriers may be suitable for economically viable dual-fuel conversion. As a result, carbon levies are likely to translate into higher freight rates for bulk commodities, with implications for global food and energy markets.
Tanker and gas carrier segments occupy an intermediate position. Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG) carriers are comparatively well positioned due to their ability to utilize cargo boil-off as fuel and their relative ease of conversion. By contrast, very large crude carriers and product tankers, which predominantly rely on heavy fuel oil, face greater uncertainty, compounded by low newbuild ordering activity linked to concerns over future fuel pathways.
Beyond individual shipping segments, the Net-Zero Framework is expected to reshape global supply chains. The development of so-called green corridors, defined as routes with dedicated low-emission fuel infrastructure, may influence sourcing decisions and competitive dynamics. Rising fuel and compliance costs could exert pressure on Just-In-Time (JIT) manufacturing models, potentially encouraging greater inventory holding and longer lead times.
Estimates suggest that average shipping costs per unit could increase by 70 to 100 per cent by 2050 compared to 2019 levels. While the impact on high-value goods is likely to be modest, the effect on low-value, bulk commodities could be substantial, with disproportionate consequences for developing economies that rely heavily on maritime imports and exports.
The global framework does not operate in isolation. The European Union has already implemented parallel measures, including the EU Emissions Trading System (EUETS) and the Fuel EU Maritime regulation. The IMO framework is broadly aligned with Europe’s decarbonization trajectory, explaining the EU’s strong support for its rapid implementation.
In Asia, major shipbuilding and maritime nations are investing heavily in alternative-fuel technologies and infrastructure, though carbon pricing mechanisms are less widespread. This may confer short-term cost advantages in certain trades, albeit subject to commercial and reputational pressures.
The United States has emerged as a critical outlier. At MEPC 83, the U.S. delegation withdrew support for the carbon pricing component of the framework, citing concerns over consumer costs and trade competitiveness. While the U.S.-flag fleet is relatively small, the country’s role as a major trading nation means its position introduces geopolitical complexity and raises questions about long-term harmonization.
Several critical elements of the Net-Zero Framework remain under development. These include the precise definition and certification of zero and near-zero emission fuels, methodologies for consistent lifecycle emissions measurement, and detailed rules governing the trading of surplus remedial units. The establishment and governance of an IMO-managed registry will be central to maintaining transparency and preventing market distortion.
The resolution of these issues will significantly influence the framework’s environmental integrity and economic fairness.
Ghana’s Strategic Policy Position
Ghana should adopt a position of constructive engagement with the Net-Zero Framework, supporting its overarching decarbonization objectives while emphasising the need for equity, flexibility, and development-sensitive implementation. Such a stance is consistent with Ghana’s climate vulnerability, limited historical contribution to global emissions, and reliance on maritime trade.
Central to Ghana’s position should be the principle of common but differentiated responsibilities. This entails advocating for phased implementation, tailored technical assistance, and preferential access to resources from the IMO Net-Zero Fund. Without these safeguards, the framework risks exacerbating existing inequalities in global trade and maritime capacity.
To underpin its diplomacy, Ghana should pursue a rigorous, evidence-based approach, including commissioning or seeking support for an independent Economic Impact Assessment (EIA) of the framework’s implications for national freight costs, port competitiveness, and inflationary pressures. Such analysis would strengthen Ghana’s negotiating credibility and inform coherent domestic policy responses.
In navigating geopolitical tensions, particularly those arising from the United States’ reservations, Ghana should avoid alignment with obstructionist positions while reaffirming its commitment to multilateralism and regulatory harmonization. Framing its engagement around fairness and transition support, rather than opposition, will enhance Ghana’s standing within the IMO and the broader international community.
Conclusion
The IMO Net-Zero Framework represents a fundamental transformation of the global shipping industry. While its implementation will be costly and disruptive, it establishes a clear and predictable pathway toward decarbonization. For Ghana, the challenge lies not in resisting this transition, but in shaping it to ensure that environmental ambition is matched by economic fairness and developmental support. Through principled, informed, and strategic engagement, Ghana can contribute meaningfully to global climate objectives while safeguarding its national maritime and trade interests.
Writer: Evans Ago Tetteh, Ph.D. – Regional Maritime University.
