IMO MEPC 83: A new era for shipping decarbonization

The recent IMO Marine Environment Protection Committee (MEPC) 83 session landed some important developments: Building on the IMO’s landmark 2023 strategy to achieve net-zero emissions from shipping by around 2050, member states have now approved groundbreaking regulations to significantly cut greenhouse gas (GHG) emissions from international shipping. Odfjell fully supports this development.

Landmark agreement despite negotiation challenges

During the negotiations, the USA withdrew over concerns about potential inflationary effects. Nevertheless, the regulations were approved by a decisive majority, marking a historic step toward maritime sustainability.

Overview of the new GHG regulations

MEPC 83 approved a new Chapter 5 in MARPOL Annex VI—known as the IMO Net-Zero Framework—alongside amendments to existing regulations. These changes will be formally adopted at an extraordinary MEPC session in October 2025, pending acceptance by two-thirds of MARPOL Annex VI parties, representing at least 50% of global merchant fleet tonnage. The regulations apply to all international ships over 5,000 GT.

Understanding the Greenhouse Gas Fuel Intensity (GFI) Regulation

The IMO Net-Zero Framework introduces two sets of targets to reduce emissions:

• The Base GFI targets act as the trajectory that ships must meet to reduce their emissions by switching to alternative fuels. These targets will act as the minimum compulsory decarbonization trajectory.
  
  Base GFI Targets serve as the compulsory minimum standards that ships must achieve through alternative fuel adoption. Failure to meet these base targets results in the requirement to purchase Tier 2 Remedial Units (RUs) (Orange band in the figure below), priced at $380 per tonne of CO₂e until 2030. This higher cost aims to incentivize proactive emission reductions rather than enabling a "pay-to-pollute" scenario.
   
• Additionally, ships must aim to meet the Direct Compliance (DC) GFI Targets, which serve as secondary compulsory goals. Failure to meet these secondary targets results in the purchase of Tier 1 Rus (blue band in the figure), priced at $100 per tonne of CO₂e until 2030, offering a more gradual transition path.
  
  Ships surpassing the DC GFI targets earn Surplus Units (SUs) (Green band in the figure), which can be banked for future compliance (up to two years), sold to under-compliant ships, or voluntarily cancelled. SUs generated by ships utilizing advanced, costly e-fuels will help bridge the economic gap with more affordable low-carbon alternatives.

MO Net-Zero Fund

Revenue from RU sales will be reinvested directly into the maritime sector to reward adoption of zero or near-zero fuels, support innovation, infrastructure projects, technology transfer, and provide relevant training. The specific details of these reward mechanisms will be finalized by March 2027, and no funds will be redistributed to IMO member states.

Regular reviews and potential amendments

The IMO will review the regulations every five years, adjusting targets as necessary. Future reviews may also extend these regulations to smaller ships, potentially down to 400 GT.

What this means for Odfjell

Odfjell’s strategy emphasizes enhanced operational efficiency, energy-saving technology adoption, wind-assisted propulsion systems (WAPS) integration, and increased use of sustainable biofuels. We are actively assessing how these new regulations will impact our operations, ensuring compliance, reducing fines, transferring costs to our customers, and ensuring ongoing efficiency.

Next steps

While MEPC 83 introduced several other actions, this update addresses the critical GHG reduction developments. The next steps before the new GHG regulation enters into force are:

1. October 2025: Adoption of the amendments during an extraordinary session of MEPC
2. Spring 2026 (MEPC 84): Approval of detailed implementation guidelines.
3. 2027: Expected entry into force, 16 months after adoption.  

IMO’s message is clear: Emissions now come with a cost, and proactive participation is essential for maintaining sustainability leadership and economic competitiveness. Odfjell will embrace this transformation and collaborate to remain at the forefront of maritime decarbonization.