Under MEPC 83, from 2028, ships over 5,000 GT must meet new GHG emission intensity targets based on transport work. Compliance is assessed annually against two thresholds: Tier 1 (baseline reduction) and Tier 2 (stricter reduction). If a vessel exceeds the set intensity limit, a penalty applies proportionally to the amount by which it fails the target. The greater the deviation, the higher the corrective action or financial penalty required. Penalty structures and enforcement measures are finalized through national or regional implementation, linked to verified emissions and operational data.

IMO Net-Zero Framework in a nutshell

IMO Net-Zero Framework is a mechanism of the International Maritime Organization (IMO) to achieve net-zero greenhouse gas (GHG) emissions from international shipping by 2050. It establishes a performance-based system that requires ships to measure and report their GHG intensity each year and to take corrective action if they exceed defined thresholds. The framework applies to all ships of 5,000 gross tonnage and above engaged in international voyages, beginning in the year 2028.

Greenhouse Gas Fuel Intensity Calculations

At the heart of the framework is the calculation of a ship’s annual Greenhouse Gas Fuel Intensity, or GFI. This is expressed in grams of CO₂-equivalent per megajoule (gCO₂eq/MJ) of energy used, based on well-to-wake emissions. The calculation includes CO₂, CH₄, and N₂O from all energy sources, such as conventional fuels, e-fuels, and renewable energy inputs like solar, batteries, or shore power. GFI is determined by dividing total GHG emissions by total energy consumed, including zero- or near-zero sources that reduce the intensity without adding emissions.

Tier 1 and Tier 2 Penalties + Base / Direct target

Each year, the attained GFI is compared to two regulatory thresholds: the Base Target and the more stringent Direct Compliance Target. These targets are derived from annual reduction factors called ZT values, which represent the percentage reduction required relative to the 2008 baseline of 93.3 gCO₂eq/MJ. Ships that meet or fall below the Direct Target generate a surplus, which may be banked, transferred, or potentially sold. Ships that fall between the Base and Direct targets must pay a Tier 1 penalty, while those exceeding the Base Target face both Tier 1 and Tier 2 penalties, with higher financial contributions for greater non-compliance. The regulation currently defines ZT values through 2030, with annual targets tightening over time. The compliance check is conducted annually based on verified fuel consumption and emissions data, aligned with the IMO Data Collection System (DCS).

IMO Net-Zero Framework in depth

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Frequently Asked Questions

GFI = Greenhouse Gas Fuel Intensity. It is the key metric under the new IMO Net-Zero Framework and expressed in gCO₂eq per MJ. It is calculated on a well-to-wake basis for all fuels and energy used onboard.
ZNZs stands for "Zero or Near-Zero greenhouse gas emission technologies, fuels, or energy sources”. They are a defined category in the IMO Net-Zero Framework, and they play a key role in encouraging early adoption of ultra-low-emission solutions and unlocking financial rewards from the IMO Net-Zero Fund. Their official definition as per regulation 31.5 is:
A ZNZ technology, fuel, or energy source is one with a GHG intensity less than 19 gCO₂eq/MJ on a well-to-wake basis, including direct emissions (e.g., CO₂, CH₄, N₂O) and upstream emissions (production, transport, etc.).
From 2027 until 2034 the ZNZ threshold is <19 gCO₂eq per MJ. From 2035 onwards the ZNZ threshold is <14 gCO₂eq per MJ. Ships using ZNZ fuels can be rewarded by the Net-Zero Fund, thereby creating financial incentives to switching to different fuels.
FuelEU Maritime and the IMO Net-Zero Framework both regulate GHG intensity (gCO₂eq/MJ) on a well-to-wake basis, but differ mostly in jurisdiction, penalties and pooling. Noteworthy is the fact that no harmonization of the regulations is currently in place, which means that ships operating to or from the EU must currently prepare for parallel compliance under both systems.
Jurisdiction
FuelEU Maritime applies to ships ≥5,000 GT calling at EU ports, regardless of flag. IMO Net-Zero applies globally to all ships ≥5,000 GT on international voyages, based on IMO jurisdiction, not geography.
Penalties
FuelEU uses a linear penalty per MJ of non-compliant energy, with no reward structure. Surplus units can be banked or pooled. IMO Net-Zero uses a tiered pricing model, $100/tCO₂eq for Tier I and $380/tCO₂eq for Tier II. Ships below the Direct Target earn surplus units, which may be banked, traded, or rewarded via the IMO Net-Zero Fund.
Pooling
FuelEU allows intra- and extra-company pooling across ships, which allows shipowners to focus their decarbonization efforts on a single ship and spread the surplus units over the rest of the fleet. IMO Net-Zero currently does not support pooling, only banking, transfer, and offsetting of units on a ship-by-ship basis.
Harmonization
At the time of writing, these regulatory frameworks operate independently, with overlapping scopes and no formal harmonization in place. As a result, ships operating to, from, or within the EU may face double compliance obligations, with no mechanism to offset, merge, or credit compliance across the systems. A single vessel could therefore incur multiple penalties for the same emissions under FuelEU Maritime, the EU ETS, and the IMO Net-Zero Framework.
IAPP covers air pollutants, the IMO Net-Zero Framework covers Greenhouse Gas Fuel Intensity (GFI). They are both part of MARPOL Annex VI, but they serve different purposes and are legally and operationally distinct. The IAPP is issued to all ships of 400 GT and above to certify compliance with:
• NOₓ emissions
• SOₓ/fuel sulphur limits
• Fuel oil quality and BDN
• Ozone-depleting substances
• Incinerators and VOC management
IAPP does not cover GHG emissions or lifecycle fuel intensity. The Net-Zero Framework requires calculation of Greenhouse Gas Fuel Intensity (GFI) but compliance is not recorded on the IAPP but via a separate certificate.
The IMO does not define a fixed default value for electricity. According to MEPC.391(81) Annex 10, the ship operator must provide a statement with a clearly referenced indication of the grid’s GHG intensity (in gCO₂eq/kWh or gCO₂eq/MJ). For renewable electricity, Sustainable Ships assumes to have negligible or zero GHG emissions, as long as it's verifiable (e.g. certified solar, wind, hydro).