New Energy World™
New Energy World™ embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low-carbon technologies.
The International Maritime Organization (IMO) has taken a step towards establishing a legally binding framework to reduce greenhouse gas (GHG) emissions from ships globally, aiming for net zero emissions by or around 2050.
Set to be formally adopted in October 2025 before entry into force in 2027, the IMO Net Zero Framework is the first in the world to combine mandatory emissions limits and GHG pricing across an entire industry sector, says the organisation. Approved by the IMO’s Marine Environment Protection Committee on 11 April, the measures include a new fuel standard for ships and a global pricing mechanism for emissions, although there is some doubt on whether the US will take part.
The measures will become mandatory for large ocean-going ships over 5,000 gwt, which together emit 85% of the total CO2 emissions from international shipping, says the IMO.
Under the draft regulations, ships will be required to comply with a new global fuel standard under which ships must reduce, over time, their annual GHG fuel intensity (GFI), calculated using a well-to-wake approach. Ships emitting above GFI thresholds will have to acquire ‘remedial units’ to balance their deficit emissions, while those using zero or near-zero GHG technologies will be eligible for financial rewards.
There will be two levels of compliance with GFI targets: a base target and a direct compliance target at which ships would be eligible to earn ‘surplus units,’ says the IMO. And ships that emit above the set thresholds can balance their emissions deficit by transferring surplus units from other ships, using surplus units they have already banked, or using remedial units acquired through contributions to the IMO Net Zero Fund.
The Net Zero Fund will be established to collect fees and disburse rewards to low-emission ships and other GHG reduction initiatives.
The move was criticised (and praised) by Europe’s environmental transport group T&E, which said the new framework would not achieve the IMO’s own decarbonisation targets and would lead to a massive increase in biofuels that cause deforestation.
Faig Abbasov, Shipping Director at T&E, said: ‘Despite a tumultuous geopolitical environment, the IMO deal creates a momentum for alternative marine fuels. But unfortunately it is the forest-destroying first generation biofuels that will get the biggest push for the next decade. Without better incentives for sustainable e-fuels from green hydrogen, it is impossible to decarbonise this heavily polluting industry. The ball is now in the court of individual countries to implement national policies to open a lifeline to green e-fuels.’
