Japan has put forward a proposal for less stringent greenhouse gas fuel intensity (GFI) targets under the proposed IMO Net-Zero Framework (NZF), arguing that the approach could address concerns among member states about the impact of the targets on international shipping.

In a submission to the IMO ahead of further technical discussions scheduled for September, Japan said its revised draft amendments are intended to provide a basis for reaching a compromise among member states. The proposal includes changes to the annual GFI reduction factors as well as the framework's compliance arrangements.

New marine fuels are estimated to account for 5.8% of total fuel use in 2030, underscoring the challenge of rapid decarbonization and helping frame why the pace of target-setting has become a central issue in the negotiations.

Two-Tier Structure Retained with Lower Reduction Factors

Under the proposed NZF, ships would be required to meet two GFI levels: a base target and a more stringent direct compliance target. Japan retains this two-tier approach but proposes lower reduction factors for both.

For the base target, Japan proposes a 7% reduction in 2030, increasing to 21.9% in 2035. Its proposed direct compliance target rises from a 21% reduction in 2030 to 43% in 2035.

Using the document's 2008 reference GFI of 93.3 gCO2e/MJ, those reductions translate to approximately 86.8 gCO2e/MJ in 2030 and 72.9 gCO2e/MJ in 2035. By comparison, the NZF as currently proposed calls for 85.8 gCO2e/MJ in 2030 and 65.3 gCO2e/MJ in 2035.

Fleet Replacement Pace a Key Consideration

Japan notes that some member states support GFI targets aligned with the 2023 IMO GHG strategy, while others have raised concerns about their feasibility and impact. Japan argues that "massive changes," including early ship replacement and semi-mandatory major conversion, should be avoided.

The proposal takes into account the composition of the existing global fleet. Japan states that 95% of merchant ships were conventional-fuelled at the end of 2025 and contends that the replacement speed of existing vessels should be factored into setting achievable GFI targets.

"It is necessary to find achievable GFI targets based on the replacement speed of existing fleets, using a performance-based approach," Japan said.

Compliance Mechanism and Fund Changes

Japan also proposes removing mandatory payments and the IMO Net-Zero Fund from the draft framework. Under its approach, ships would in principle comply through the use of low-emission fuels or surplus units (SUs).

Ships that cannot balance their compliance deficits with surplus units could instead make direct contributions to IMO-approved projects. Japan says companies could also choose projects aimed at supporting particular new fuels or technologies.

The revised draft additionally removes the fixed GFI reduction factor for 2040. Japan argues that future targets should be reviewed periodically and take into account the global availability, affordability, and scalability of new fuels and technologies.

Japan says its revised draft provides a possible basis for further discussions aimed at finding a final compromise among IMO member states, with the September technical talks likely to test how much flexibility remains around both the emissions targets and the compliance design.

Source: Ship & Bunker