The International Maritime Organization (IMO) has set forth a Net-Zero Shipping Framework (NZF) with the intention of reducing emissions in the maritime sector. It was approved in April 2025 and is set for adoption in October 2025, pending a vote which will take place during the Marine Environmental Protection Committee meeting from October 14th – 17th.

108 members are eligible to vote, including 10 from CARICOM. If adopted, it will come into effect in 2028.

The framework seeks to reduce greenhouse gas (GHG) emissions from international shipping to align with the 2050 net-zero target. Key components include a Global Fuel Standard (GFS) setting annual GHG intensity reduction targets, a two-tier carbon price mechanism, and a credit trading system funded by penalties to reward zero and near-zero emission fuels and support a just transition.

 

Photo Credit: Luvo Productions

The Seymour Sun—a methanol-powered vessel operated by Waterfront Shipping and owned by NYK Bulkship (Asia) Pte. Ltd.— the first ship in the region to be methanol fueled via ship-to-ship bunkering.

 

According to DNV, "The regulations provide a technology-neutral approach whereby performance is measured as well-to-wake GHG emissions per energy unit used, supplemented by sustainability criteria. The reduction factors approved as part of the regulations provide long-term certainty to ships regarding the GHG emissions reduction requirements, as well as long-term certainty to fuel providers regarding potential demand."

The NZF presents a new regulatory era in which ships will be required to gradually adopt fuels that are typically three to four times more expensive compared with conventional fossil fuels. Given the long lifespan of ships, shipowners should prepare now for the new net-zero GHG emission regulations to ensure cost-effective compliance, both at the ship and the fleet level.

The Framework will apply to all oceangoing ships over 5,000 gross tonnage (GT). These ships are responsible for over 85% of global shipping emissions and are already covered by reporting requirements for fuel data collection. Ships under 5,000 GT are currently not covered.

If adopted, this creates opportunities for countries like T&T to seek new markets for petrochemical products produced domestically. Essentially, the NZF encourages the use of cleaner fuels or technologies. If a ship's GHG fuel intensity is too high, it will pay a price corresponding to the greenhouse gases it emits above certain thresholds. Conversely, ships will be rewarded for using cleaner fuels.

Methanol, ammonia, and LNG can be used as maritime fuels under this framework since they emit less when consumed than traditional diesel or heavy fuel oil. This provides opportunities for producers here, and it also opens up the possibility for low-carbon fuel bunkering.

These fuels however are are typically 3 to 4 times more expensive today but will reduce over time with increased production and lower technology costs.

Some countries in the Caribbean are concerned that the NZF will significantly push up their shipping costs, which are obviously a very significant issue for small islands states.

The Methanol Institute has recently stated that, "Methanol producers are ready to deliver. Today, there is already enough methanol available to fuel the ships in operation. More than 250 projects for low-carbon, bio-, and e-methanol are under development worldwide, with significant new volumes expected to come online by 2027–2028. The Methanol Institute estimates that between 7 and 14 million tonnes of renewable and low-carbon methanol could be available globally by 2030. This demonstrates that the supply chain is moving quickly to scale and that the fuels to enable the transition will be available when they're needed."

The Ammonia Energy Association has also weighed in and said that The Net-zero Framework is a good step in the right direction. Its adoption in October is critical to establish the business case for clean ammonia and other clean fuels to be adopted as maritime fuels. Adoption of this framework will not only drive progress on climate goals but also support broader economic growth.