Negotiations on the IMO's Net-Zero Framework (NZF) resume this week, with member states set to work through key issues still unresolved in the proposed shipping climate rules.

The IMO's Intersessional Working Group on Greenhouse Gas Emissions will meet in London from September 1-4, ahead of further discussions on the framework later this year. If adopted, the framework would mark the first time international shipping — a sector that the IMO says accounts for roughly 3% of global greenhouse gas emissions — becomes subject to a binding global carbon price, making it one of the most significant climate measures ever undertaken by a UN agency.

Carbon Pricing at the Center

One of the main issues will be the framework's proposed global carbon pricing mechanism, which could generate an estimated $10-15 billion a year. Governments still need to agree on how those revenues would be managed and spent, including funding for developing countries and the shipping industry's transition to cleaner fuels. Several countries have submitted proposals for the future fund.

Tuvalu has proposed strengthening the framework through a flat levy, while Australia, Canada, South Africa and the UK support moving ahead with the NZF as agreed. Brazil has proposed delaying some of the framework's ambition while retaining the carbon price.

Talks to Test Support for NZF in its Current Form

Japan has called for weaker carbon-intensity targets and the removal of the carbon price, while Liberia has put forward a much more limited approach to global climate regulation. The Liberia-led proposal has been endorsed by the Union of Greek Shipowners, arguing it offers a balanced and pragmatic foundation for further discussions. However, Norway has opposed the proposal, stating it benefits fossil LNG.

Tuvalu Transport Minister Simon Kofe said the framework was the result of years of negotiations and should not be weakened further.

"If we are to negotiate the NZF once again, it should only be to increase the climate ambition and not to weaken it further," Kofe said.

The climate talks take place against the backdrop of geopolitical conflicts.

Ports and shipping companies have also called for regulatory certainty, saying clear global rules are needed to support investment in cleaner fuels, vessels and infrastructure. The outcome of the talks carries significant commercial weight: the rules are expected to shape decisions on vessel orders, fuel contracts and port infrastructure for years to come.

"The Port of Rotterdam strongly encourages continued discussions about a global framework for greenhouse gas emissions in the maritime sector, which will help to achieve the goals set out in the International Maritime Organization's 2023 GHG Strategy," Boudewijn Siemons, CEO of the Port of Rotterdam, said. That 2023 strategy committed member states to reaching net-zero greenhouse gas emissions from international shipping by or around 2050, with the NZF serving as the principal mechanism for delivering interim targets.

Narrow Divide from April Round

The talks follow a closely divided round of negotiations in April. At that meeting, 55 countries supported the NZF in its existing form, while 51 backed reopening it for substantial changes.

The discussions this week will focus on finding common ground on the remaining details and keeping work on the framework moving towards adoption later this year. A second round of working group meetings is scheduled in November, after which the framework is due to be put to an adoption vote in the IMO Assembly — a timeline that gives member states only a narrow window to resolve the remaining divisions.

Source: Ship & Bunker