Four changes would make the IMO Net-Zero Framework more effective

On April 11, the International Maritime Organization’s (IMO) Marine Environment Protection Committee (MEPC 83) approved the Regulations on the IMO Net-Zero Framework. Meant to lower the well-to-wake (WTW) greenhouse gas fuel intensity (GFI) of ships over 5,000 gross tonnage, the direct compliance target requires a 21% GFI reduction by 2030 increasing to 43% by 2035 compared to the 93.3 gCO2eq/MJ fossil fuel baseline of 2008. No GFI target has been set for 2050. Shipowners who don’t attain GFI targets will either buy credits, use their own banked credits, or pay penalties. (There are lower penalties for ships that achieve a “base” compliance target of at least 8% in 2030, increasing to 30% in 2035.) 

The GFI targets are not strong enough to reduce absolute GHG emissions in line with the IMO’s 2023 GHG Strategy and it’s uncertain how many ships will directly comply or pay to pollute. It’s also unclear how the framework will reward the use of zero- or near-zero life-cycle GHG fuels. Nevertheless, IMO’s Net Zero Framework will be one of the key levers for achieving IMO’s goal of net-zero GHG emissions from maritime shipping “by or around” 2050 and a related goal for zero or near-zero GHG fuels to account for 5%–10% of energy use in international shipping by 2030. But without accurate accounting rules, nominally “clean” fuels used to comply with the framework could be substantial GHG emitters. 

To accurately estimate the GHG intensity of marine fuels, IMO could consider changes in four areas of its 2024 Life-Cycle Assessment (LCA) Guidelines before the IMO Net-Zero Framework is fully implemented in 2028.

1. Account for indirect land-use change (ILUC) from biofuels. The IMO’s aviation counterpart, the International Civil Aviation Organization (ICAO), includes quantitative ILUC emission factors in its policies. Other regulations, including FuelEU Maritime, limit or exclude food or feed-based biofuels. The Net-Zero Framework does neither.

The most important factor influencing life-cycle GHG emissions of food and feed crops is ILUC, which occurs when incentives for biofuel production divert food and feed crops from existing uses to biofuel. Higher crop prices caused by biofuel incentives create economic pressure to bring more land into production, which can include deforestation. Even using crops grown on existing croplands that meet IMO’s sustainability criteria can still create land use pressure given the global nature of markets. 

Counting only direct GHG emissions from a biofuel’s life cycle gives an incomplete picture of its climate impact. For example, Figure 1 illustrates the life-cycle GHG emissions of hydroprocessed vegetable oils (HVO). Direct GHG emissions (shown in purple) are less than half those of fossil marine fuels. However, when ILUC emissions (blue) are included, the full life-cycle GHG emissions are accounted for. At best, palm or soy HVO provide little GHG benefit. At worst, they emit more than marine fossil fuel. Since HVO is the cheapest, most commercially ready drop-in biofuel, these fuels would be attractive under the Net-Zero Framework. 

Figure. Life-cycle GHG emissions for HVO compared with a fossil fuel comparator of 94 CO2e/MJ (the ICCT’s estimate of the GHG intensity of fossil marine fuels). ILUC values are from ICAO, which refers to two ILUC models to develop its values; error bars show ILUC values from each of these models. Rapeseed and soybean oils are global ILUC numbers, while the palm oil ILUC number is for Malaysia/Indonesia (no global number is available). Direct emissions are typical values from the European Union’s Renewable Energy Directive.

If IMO’s LCA Guidelines aren’t amended to include ILUC emission factors, the calculated GHG emissions for food- and feed-based biofuels will be underestimated; that could substantially inflate their purported GHG emissions reductions. Without amendment, large volumes of food and feed biofuels could be used to meet GFI targets.

2. Accurately account for methane emissions. IMO’s LCA Guidelines underestimate methane slip from LNG-fueled ships that use the most common LNG engine technology. Methane has a 100-year global warming potential (GWP) nearly 30 times higher than carbon dioxide (CO2); its 20-year GWP is more than 80 times higher. Measurements of methane slip from ships using the most common LNG engine (LPDF 4-stroke) averaged 6.4%, much higher than IMO’s assumption of 3.5%. Real-world measurements of other LNG engine technologies are underway.

Increasing IMO’s default methane slip assumption for LPDF 4-stroke engines to at least 6% would result in life-cycle GHG emissions nearly 20% higher than conventional marine fuels for LPDF 4-stroke engines; continuing to use 3.5% methane slip results in LNG having GHG emissions that are about the same as conventional fuel. (Shipowners could get credit under the Net-Zero Framework for measuring and certifying lower methane emissions). IMO’s LCA Guidelines lack a default emission factor for well-to-tank (upstream) emissions for fossil LNG, which ranges between 18.5 and 28 g CO2e/MJ. That’s 20%– 30% of the life-cycle GHG intensity of heavy fuel oil. IMO will agree on a value as it amends the LCA guidelines prior to implementing the Net-Zero Framework.

3. Account for nitrous oxide (N2O) emissions from ammonia. Renewable ammonia is emerging as a viable choice for the maritime sector, but IMO’s LCA Guidelines don’t account for its N2O emissions. The GWP of N2O is nearly 300 times that of CO2 (N2O’s 100-year and 20-year GWPs are the same); therefore, even small amounts of emissions can negate the climate benefits of ammonia. Recent ammonia dual-fuel engine experiments show a wide range of N2O emissions. IMO’s LCA Guidelines could include a default N2O emission factor for ammonia-fueled engines that’s high enough to avoid underestimating their climate impacts. As we recently suggested in comments on the United Kingdom’s plans to include shipping in its Emissions Trading Scheme, one option could be 0.0025 g N2O/g fuel (equivalent to approximately 36 g CO2e/MJ). That’s based on the maximum N2O emissions observed in two separate peer-reviewed studies, as summarized in a submission to MEPC 83. Shipowners could then measure, report, and verify N2O emissions to use a lower value when calculating their GFI.

4. Include black carbon. Black carbon is the second-largest climate pollutant emitted by ships; it accounts for 8% of shipping’s CO2e emissions based on GWP100 and 23% based on GWP20. But it isn’t considered in IMO’s LCA Guidelines. Having already agreed to guidelines to measure black carbon and to voluntary guidelines to reduce black carbon in the Arctic, IMO is now considering mandatory measures to reduce black carbon. But a global regulation could be achieved by amending the LCA guidelines to include black carbon. Note that the European Commission is considering including black carbon in the FuelEU Maritime framework during its current review, which runs through 2027.

The IMO has tasked an independent LCA expert group with recommending ways to improve the LCA Guidelines, including how to address ILUC and which default emission factors to use. The group will meet twice this year, and their recommendations will next be considered by MEPC 84 in 2026. We recommend the group consider the four changes we’ve outlined. Addressing these issues in the LCA Guidelines before full implementation of the Net-Zero Framework in 2028 would substantially advance IMO’s goals. Otherwise, we risk having a framework that promotes cheap-but-high-emitting fuels that could increase GHG emissions.