Fleet Decarbonisation

The strategic framework: the IMO GHG Strategy

Module objectivePlace global and regional instruments within the 2023 IMO Strategy checkpoints, distinguishing strategic ambitions, requirements in force and measures not yet adopted.

The decarbonisation of international shipping stems from the 2023 IMO Strategy on Reduction of GHG Emissions from Ships, which raised the ambition of the initial 2018 strategy. The text sets a target of reducing the carbon intensity of international shipping by at least 40% by 2030 compared with 2008, with the ambition of reaching net-zero emissions «by or around, i.e. close to» 2050. Alongside intensity, the Strategy sets checkpoints on total emissions: at least −20%, striving for −30%, by 2030, and at least −70%, striving for −80%, by 2040, both compared with 2008. And it sets a third level of ambition that is often forgotten: by 2030, zero- or near-zero-GHG technologies, fuels and energy sources should represent at least 5%, striving for 10%, of the energy used by the sector.

Instruments as of 15 September 2026: distinct scopes and an unadopted Net-Zero Framework.

The resulting instruments

The Strategy imposes nothing on a ship: it sets the ambition and the checkpoints, and leaves it to the instruments that follow from it to turn those into obligations verifiable ship by ship. This is the distinction to hold on to throughout the course — looking in the text of the Strategy for the requirement that applies to one ship means looking where it is not.

EEXI: the one-off technical requirement

Module objectiveDetermine when EEXI applies, how it is verified and the operational consequences of EPL, ShaPoLi and hull or propeller work.

The Energy Efficiency Existing Ship Index (EEXI), introduced through an amendment to MARPOL Annex VI, extends to existing ships a design efficiency logic similar to that already required for newbuildings (EEDI). It applies to ships of 400 GT and above in the categories subject to EEDI. Unlike the CII, the EEXI is a technical requirement normally verified once, not an indicator that is updated every year.

How it works

• The ship's theoretical EEXI index is calculated, based on technical design characteristics (engine power, hull type, speed).
• It is compared against a reference value (required EEXI) set for the ship's type and size.
• If the calculated value exceeds the reference, the ship must adopt measures to come within the limits: the most common are limiting installed engine power (Engine Power Limitation, EPL) or technical interventions on the hull.
• EEXI is verified at the first applicable annual, intermediate, renewal or initial survey from 1 January 2023 (regulation 5.4.7). Evidence includes the verified technical file and IEE certification; a major conversion can require renewed verification under regulation 5.4.8.

Check categories and exclusions in MARPOL Annex VI regulations 19, 23 and 25 and the survey cycle in regulation 5. Compare attained with required EEXI; a major conversion can require renewed verification. For EPL/ShaPoLi, reserve use, records and reactivation follow the approved Onboard Management Manual and applicable guidelines.

CII: the annual operational indicator

Module objectiveCalculate and interpret the annual CII cycle, recognising Z factors, ratings and the conditions requiring a corrective-action plan in SEEMP part III.

The Carbon Intensity Indicator (CII) measures the carbon intensity actually generated by the ship's operation over the course of the year, expressed in grams of CO2 per deadweight tonne per nautical mile travelled (or an equivalent unit for the ship type). Unlike the EEXI, the CII is recalculated every year based on actual consumption.

CII rating bands (A–E) and the required line. The reduction factors are adopted through 2030 under MEPC.400(83); the ship trajectory drawn over the bands remains an example.

The consequences of the rating

The Z reduction factors applied to the required line are set up to 2030 against the 2019 reference line: −5% in 2023, −7% in 2024, −9% in 2025, −11% in 2026, −13.625% in 2027, −16.250% in 2028, −18.875% in 2029 and −21.500% in 2030. The 2027–2030 values were adopted by MEPC 83 through resolution MEPC.400(83), amending the G3 Guidelines in MEPC.338(76). Phase 2 of the review, running to 2028, may still develop metrics, the SEEMP framework and enforcement: it does not make the adopted factors «undecided».

Levers to improve the rating

Since the CII depends on actual consumption and not only on the ship's technical characteristics, acting on the rating is largely a matter of operational management: speed, route planning, hull cleaning, cargo and trim optimisation all directly affect the current year's indicator.

For CII ship categories of 5,000 GT and above, the denominator remains capacity × total annual distance reported under IMO DCS, both under way and not under way. MEPC.412(84) retains DWT for the listed cargo categories and GT for cruise, ro-ro and ro-pax ships: actual cargo does not automatically replace capacity. An A–C rating does not remove monitoring or SEEMP duties; three consecutive D ratings or one E rating trigger corrective planning.

Example without G5 corrections: 3,000 t CO₂ = 3 billion grams; with 20,000 DWT and 10,000 nautical miles, CII = 15 gCO₂/(DWT·nm). The rating then needs the category reference line, Z factor and G4 boundaries. Submit the revised SEEMP corrective plan for repeated D or E within one month of CII reporting (regulation 28.8).

The IMO Net-Zero Framework: architecture

Module objectiveExplain the architecture of the approved Net-Zero Framework text without presenting targets, prices or remedial units as obligations in force.

The Net-Zero Framework represents the IMO's attempt to introduce, for the first time at the level of an entire global sector, a mandatory limit on emissions intensity combined with a carbon pricing mechanism. The text, in the form of a new chapter of MARPOL Annex VI, was preliminarily approved during the MEPC 83 session in April 2025.

The two pillars

Structure of the pricing mechanism (draft)

NZF draft: Tier 1 remedial units; Tier 2 also with transferred or banked surplus. Separate ZNZ rewards.

In the approved text, the direct compliance target is stricter than the base target. Between them, Tier 1 deficit would be covered by USD 100/tCO₂e remedial units. Above the base target, an additional Tier 2 deficit could be covered by transferred or banked surplus units, or USD 380/tCO₂e remedial units. These are 2025-text prices for 2028–2030, not current prices or confirmed deadlines.

Below the direct compliance target, a positive balance can generate surplus. Surplus units and any ZNZ rewards are distinct instruments; reward eligibility requires a separate assessment.

The Net-Zero Framework: timeline and current status

Module objectiveReconstruct the Net-Zero Framework process and translate procedural uncertainty into auditable decision scenarios.

Understanding the recent timeline of the Net-Zero Framework is essential to avoid confusing «approved in draft» with «in force»: these are two very different states with different practical implications for fleet planning.

NZF process updated 15 September 2026, including ISWG-GHG 22. Resumption on 4 December subject to confirmation.

The key steps

• April 2025 (MEPC 83): the text is approved, with a large majority of member States in favour. Approval is not adoption.
• October 2025 (MEPC/ES.2, extraordinary session): the formal adoption vote expected at this session is adjourned by twelve months, with 57 votes in favour of adjournment and 49 against.
• 27 April–1 May 2026 (MEPC 84): no adoption. The Committee arranged further intersessional work to address differences, allowing new proposals to amend the text. Resumption of the extraordinary session on 4 December remains subject to MEPC 85 confirmation.
• 30 November – 3 December 2026 (MEPC 85), followed by the resumption of the second extraordinary session on Friday 4 December 2026: this is where the next attempt at adoption will be played out. The date is not settled, however — the IMO gives it as subject to confirmation by MEPC 85 itself — and the intersessional work preceding it is set for 1–4 September and 23–27 November 2026.
• Any adoption must establish the text and applicable procedure. Under the ordinary MARPOL tacit-acceptance route, acceptance takes at least ten months and entry into force follows six months later, subject to treaty conditions. This sequence is not a confirmed Framework date: negotiation status, acceptance and application must be checked against the adopted instrument.

EU ETS: shipping in the European carbon market

Module objectiveMap EU ETS scope, responsible entity, gases, phase-in and surrender deadline for a ship and for a shipping company.

The European Union has extended its Emissions Trading System (ETS) to maritime transport: it covers ships of 5,000 GT and above calling at ports in the Union and the European Economic Area. The share to be covered is counted on the emissions year, not the surrender year: 40% of verified 2024 emissions, 70% of 2025 emissions and 100% of 2026 emissions, each surrendered by 30 September of the following year. 2026 emissions are therefore surrendered in September 2027. From 2026 the scope is no longer CO₂ alone: it also covers methane and nitrous oxide. Offshore ships of 5,000 GT and above enter the EU ETS in 2027: a narrower scope than MRV's, and not to be confused with it.

Ordinary scope concerns commercial cargo or passenger transport; check exclusions and derogations for the service, port and route. The 100% and 50% shares describe ordinary geographical scope, not a substitute for that assessment.

How it works in practice

• 100% of emissions on voyages between EU/EEA ports and during port stays is covered, and 50% of emissions on voyages entering or leaving the area.
• The responsible entity is the shipping company: the registered owner, or the ISM company that has assumed operational responsibility and received a documented mandate from the registered owner for ETS and MRV. Without that mandate, the registered owner is responsible. Tasks such as data collection or allowance purchasing may be outsourced — and often are — but outsourcing a task does not transfer regulatory responsibility: before the authority, the designated company always answers.
• Allowances are surrendered by 30 September of the following year, on the basis of the verified MRV report.
• The price of allowances is determined by the European ETS market, exposing the company to that market's volatility.

Separate geographical share and phase-in: 1,000 verified tCO₂e on an extra-EEA voyage in 2026, without derogations, give 1,000 × 50% × 100% = 500 allowances to surrender in 2027. Do not apply the 50% twice to an aggregate already limited to ETS scope.

FuelEU Maritime: intensity and flexibility

Module objectiveApply well-to-wake limits, pooling, banking, borrowing to a fleet, keeping FuelEU distinct from EU ETS.

FuelEU Maritime has applied since 1 January 2025 to ships above 5,000 GT carrying cargo or passengers commercially, irrespective of flag, within Article 2 and subject to its exclusions. This differs from the inclusive EU ETS threshold. The limit concerns the annual average well-to-wake GHG intensity of energy. Check geographical scope separately: the Commission reports delayed incorporation into the EEA Agreement; until incorporation, Norwegian and Icelandic ports are third-country ports for FuelEU.

The trajectory starts from the 2020 fleet average of 91.16 gCO₂e/MJ and tightens in steps: −2% from 2025, −6% from 2030, −14.5% from 2035, −31% from 2040, −62% from 2045 and −80% from 2050. OPS is a distinct duty covered in the next module: port-call preparation.

Reduction trajectory of GHG intensity required by FuelEU Maritime: statutory thresholds under Article 4, not indicative values.

Flexibility mechanisms

Pooling requires a positive total balance; a deficit ship must not worsen its deficit and a surplus ship must not become deficient. Borrowing has the 2% limit defined in Article 20(2), a 10% repayment uplift and cannot be used in two consecutive periods. Record decisions within Articles 20–21 deadlines; pooling does not offset an OPS connection failure.

A ship cannot use borrowing and pooling in the same period (Article 21(6)). Article 5 RFNBO rewards and the Annex I wind factor have specific conditions: distinguish these incentives from the general limit.

OPS: duties and port-call preparation

Module objectiveAssess the OPS duty for a ro-pax case, identify the evidence to record and distinguish the port-stay duration from non-compliant hours.

This module applies the shore-power topic explored in Carbon. It belongs to the decarbonisation course: OPS remains linked to FuelEU Article 6 and AFIR infrastructure, but requires a port-call decision. The case is illustrative and does not describe an actual GNV ship or call.

First check a passenger or container ship above 5,000 GT, commercial use and Article 2 scope; then the year, port and stay at the quayside. Equipment availability alone does not determine the duty.

OPS: applicability and evidence

The reference is FuelEU Article 6: from 2030 at AFIR Article 9 ports; from 2035 at other Member-State ports with available OPS at the quay. In 2030, unavailability may support an exception; it does not remove the port from scope. The eight Article 6(5) exceptions have specific conditions: a stay must actually last less than two hours; batteries must cover all demand and meet Article 6(5)(b) and Annex III. Determination and recording follow Article 6(9). From 2035, the Article 6(10) limit concerns only exceptions (d), (e) and (f) at AFIR ports.

Explore OPS and its calculator in Carbon · Operational preparation in Knowledge

Article 6(3) allows earlier national OPS requirements in 2030–2034 at other ports; check them.

Evidence to organise before the call

1. Ship, GT, service, year and port: document why the case falls within scope.
2. Actual stay and connection times, electrical demand and equipment availability.
3. Ship–shore compatibility and relevant technical records.
4. Any exception: the specific condition and recording under Article 6(9), not a generic assertion.
5. Any non-compliant hours: keep them separate from the total port stay.

Alternative fuels: a comparative overview

Module objectiveCompare energy carriers by pathway, well-to-wake performance, ship compatibility, availability and HSE risk.

The choice of fuel is the most significant structural decision, and the hardest to reverse, in a company's decarbonisation strategy, with impacts on newbuildings, retrofits, bunkering infrastructure and crew training.

Qualitative comparison of pathways and safety checks; no universal availability ranking.

For hydrogen distinguish compressed and liquid storage: high pressure and cryogenics do not apply in the same way. The matrix summarises design checks; it does not certify suitability or assign universal availability scores.

Short-term operational levers

Module objectiveSelect measurable operational levers and define baselines, owners and commercial limits for each ship.

Speed, hull condition, trim and routing offer efficiency opportunities to assess for each ship. Before acting, define the baseline, safety limits, approvals, responsibilities and service constraints. Effects on CII, ETS and FuelEU are not identical.

Decarbonisation levers: short term (operational) and long term (structural). The benefit of each depends on ship, route and baseline and must be verified by measurement; scrubbers are absent because they reduce SOx and particulate matter, not CO₂.

Short-term levers in detail

Reducing energy use does not automatically reduce FuelEU intensity in gCO2e/MJ: with unchanged mix and factors, the ratio stays the same. The balance may change through in-scope energy. Measure total consumption, CII, FuelEU intensity and ETS cost separately; structural investments also have limits and costs.

Structural investments and newbuildings

Module objectiveEvaluate retrofits and newbuildings through technical, regulatory and financial scenarios, separating GHG reduction from pollutant control.

Long-term decisions — retrofits, newbuildings, auxiliary technologies — require significant capital and long amortisation horizons, which makes them particularly sensitive to the regulatory uncertainty described in Module 5.

The main structural options

• Efficiency and propulsion retrofits: engine and propeller modifications, hydrodynamic devices, air lubrication, waste-heat recovery, batteries or wind-assist may reduce fuel consumption or replace part of the fossil energy demand, but the benefit must be measured against the ship's actual operating profile. Scrubbers are not a CO₂-reduction measure: they address SOx and particulate limits depending on configuration, may in fact increase energy consumption, and must not be counted as a decarbonisation lever.
• Dual-fuel newbuildings: maintain fuel flexibility, at a higher construction cost.
• Auxiliary wind technologies (wind-assist): rigid sails, Flettner rotors and similar systems can reduce primary fuel consumption under specific route conditions.

The investment dilemma under regulatory uncertainty

Optionality can reduce some investment risks but does not remove technical constraints or irreversible choices. Dual-fuel and fuel-ready do not mean compatibility with any fuel: specify conversions, space, approvals, fuel supply and costs before valuing flexibility.

Building a multi-year compliance plan

Module objectiveBuild a ship-by-ship multi-year plan integrating applicable obligations, data, contracts, operational levers and investments.

The complexity and overlap of the instruments seen in previous modules make an integrated compliance plan necessary, one that coordinates EEXI, CII, EU ETS and FuelEU while keeping obligations, records and responsibilities distinct; the Net-Zero Framework remains a scenario until adoption.

The components of a good plan

• Mapping of applicable obligations for each ship in the fleet, based on routes, flag and size.
• Continuous monitoring of CII and consumption, with a projection of the expected year-end rating.
• Periodic assessment of the short-term operational levers still available for each ship.
• Multi-year structural investment plan, with alternative scenarios based on regulatory developments.
• Contractual clauses with charterers that clearly allocate compliance costs: for time charters there are industry standard clauses — BIMCO's ETS Emissions Trading Scheme Allowances Clause, CII Operations Clause and FuelEU Maritime Clause for Time Charter Parties 2024 — to assess and adapt to the actual contract, without automatically transferring regulatory responsibility.
• Regular updating of the plan based on regulatory developments, particularly on the outcome of the next attempt at adopting the Net-Zero Framework, with extraordinary resumption scheduled for 4 December 2026, subject to MEPC 85 discussions.

Emerging trends

Module objectiveDefine a regulatory-watch process that separates adopted facts, negotiated texts and assumptions, updating scenarios.

The maritime decarbonisation framework will continue to evolve rapidly in the coming years, and some directions already appear to be taking shape.

What to watch in the coming months

• The outcome of the next attempt at adopting the Net-Zero Framework, at the resumed extraordinary session on 4 December 2026, immediately after MEPC 85, including the debate on the acceptance procedure (tacit or explicit) that will affect its entry-into-force timing.
• The development of detailed guidelines on fuel lifecycle analysis methodologies and the GFI registry, under discussion at the Intersessional Working Group during 2026.
• The evolution of the availability of zero/near-zero emission fuels at commercial scale, which will determine the real effectiveness of the reward mechanism envisaged by the Net-Zero Framework.
• The possible convergence, or conversely the growing fragmentation, between the global IMO framework and the regional European measures already in force.

Reporting and regional carbon pricing: MRV, DCS and the UK ETS

Module objectiveGovern DCS, MRV, EU ETS, FuelEU and UK ETS as separate but reconciled data chains, with verified scopes and deadlines.

Consumption is a starting point, not the only determinant. Emission factors, energy, distance, capacity, fuel certification, scopes and exceptions also matter. DCS, MRV, FuelEU and ETS require reconciled but distinct data chains.

The two data chains: DCS and MRV

The IMO DCS collects, for ships of 5,000 GT and above, annual consumption by fuel type, distance travelled and hours under way; the data go to the flag or the RO, which issues the Statement of Compliance to be kept on board. The EU MRV requires, for EU/EEA voyages, per-voyage and per-ship data based on an approved monitoring plan, with the verified report uploaded to THETIS-MRV and the document of compliance carried on board. Its scope is no longer the DCS scope: since 1 January 2025 MRV also covers general cargo and offshore ships from 400 to below 5,000 GT (Article 2(1a)), as well as offshore ships of 5,000 GT and above (Article 2(1b)), and it covers CO₂, CH₄ and N₂O for emissions from 2024. The resulting offshore scope therefore starts at 400 GT; this does not automatically extend EU ETS to the same ships. Ship type, tonnage, activity and voyage must therefore be checked separately: MRV applicability cannot be inferred from DCS applicability.

UK ETS: scope and deadlines

From 1 July 2026 the United Kingdom has extended its ETS to shipping: it covers cargo and passenger ships of 5,000 GT and above on UK domestic routes and during stays at UK ports. The gases covered are CO₂, methane and nitrous oxide, measured on a tank-to-wake basis. The monitoring plan is per company, not per ship. The verified annual report is due by 31 March of the following year, and that already applies to 2026 and 2027. Surrender follows two different rules: ordinary from the 2028 scheme year, on 30 April of the following year; and transitional for the first two years, because 2026 and 2027 allowances are both surrendered on 30 April 2028. The first cycle, moreover, is not a full year but the half-year 1 July – 31 December 2026. Offshore units come in from January 2027.

What changes for management

With multiple carbon-pricing and reporting instruments, consumption data stop being a technical figure and become an accounting figure: bunker delivery notes, flowmeter readings and engine-room records must reconcile with each other. A discrepancy found at verification costs more — in time, in credibility and sometimes in allowances — than a whole year of careful recording.

UK ETS: also check excluded activities and qualifying Scottish ferry services; in-port activities include port movements. Apply for the monitoring plan within 42 days of the first in-scope activity. Under MRV, the authority may require reports before 31 March, but not before 28 February. The table does not replace competent-authority instructions.

DCS: MEPC.385(81) entered into force on 1 August 2025. MEPC.1/Circ.913 distinguishes early application, existing ships retaining prior granularity throughout 2025 and moving to enhanced data from 2026, and ships delivered from 1 August 2025 collecting enhanced data from delivery. Verify SEEMP Part II for the case and flag instructions. More detailed consumer and transport-work data are also required; they do not automatically replace the CII denominator.