From 1-4 September 2026, the 22nd meeting of the intersessional working group on reduction of greenhouse gases from shipping took place at the IMO Headquarters in London. We were represented throughout the full week. Below is an account of the discussions, potential and hurdles following a week of intensive multilateral negotiations.
This was the first working group (WG) meeting during which new terms of reference that were agreed at MEPC 84 in the spring, were up for discussion. The terms of reference allow for both existing and new submissions to be discussed which we believe is important. The importance lies in the formal purpose of the WG which is seeking agreement on a broader text that can be acceptable to all, following the extraordinary MEPC meeting in October last year when the Net-Zero Framework (NZF) faced fierce opposition from several member states.
The four days were largely spent on deliberations on the first agenda item:
The Group is instructed, taking into account documents submitted to MEPC 84 and 85, previous sessions of ISWG-GHG, as well as documents submitted to ISWG-GHG 22 and 23, as applicable, to: 1: consider proposals, including those contained in the documents referred to above, on how to address concerns with the draft amendments to MARPOL Annex VI on the Net-Zero Framework, in line with the 2023 IMO GHG Strategy.
The overall takeaway from this meeting is that IMO member states continue to engage constructively in the discussions, but that disagreements on several crucial issues relating to a possible future IMO mid-term measure persist.
Several delegations recalled the unanimous agreement on the 2023 IMO Strategy on Reduction of GHG Emissions from Ships, while many other delegations refrained from making explicit reference to the strategy.
Based on our observations, it appears that there may no longer be universal agreement on the strategy’s ambition and indicative checkpoints.
Disagreements on central parts of a future framework are of such magnitude that convergence already by December seems challenging.
Substantive issues of divergence
It was evident from statements made by member states that there is still wide disagreement on substantive parts of the framework.
That is particularly the case for the Greenhouse Gas Fuel Intensity (GFI) trajectory itself: what shape should the trajectory have? Should it be a 2-tier GFI as in the NZF or a single tier as in FuelEUMaritime?
The trajectory question is not only about setting the regulatory requirements to the reductions. It is also about whether the requirements should be set by the regulators as opportunistic requirements seeking to drive the availability of the required fuels, or whether the reduction requirements should be set based on availability, scalability and affordability of fuels in the market.
The question on one versus two tiers may be of less significance in this relation but more about the system’s ability to generate funds.
Whether funds should be generated in the framework is another issue of divergence. The NZF has a 2-tier GFI structure with the distinct ability to generate substantial amounts of funds to be channelled through a central Fund operated by the IMO. Several member states oppose this for a variety of reasons – one being the prerogative of sovereign states to levy taxes on their respective citizens.
Several other states welcome the fund-generating aspect of a framework so that just and equitable transition (JET) can be facilitated by compensating eligible states for disproportionate negative impacts (DNI).
It is our observation that this core disagreement seems to have widened substantially since the MEPC 83 approval of the NZF.
Spending funds generated by a framework
This is also an area of disagreement. Are collected funds to be spent entirely in-sector? Or is there a case for giving funds to states for their own use? Some member states firmly believe the framework should not generate funds by itself but rather leave any monetisation of elements of the framework to the private sector.
Support for zero or near-zero fuels and technologies is also an area of some divergence. Should such fuel and energy sources be rewarded in excess of surplus unit (SU) generation? Should there be a multiplier to amplify use of such fuels and technologies? Naturally, any possible reward would also need to be contingent on the stringency of the trajectory in the first place.
Does everything have to be agreed as one package? Some member states argue that a push to see everything resolved, rather than moving on to elements that enjoy agreement now, is not ideal. Other states believe that since the core architecture of the GFI is less controversial, a package of technical mid-term measures should be pushed first, after which agreement on the economic element can be sought.
The discussion on an IMO Fund or Facility is however not purely political or principal. It may have very practical implications for the industry, and the world, as it is presently the “safety-valve” which prevents ships from potentially becoming stranded assets should the over- and under-compliance not balance. A purely technical measure without the ability to either pay for compliance, or some other measure, risk resulting in some ships being rendered unable to trade.
Next step
While this session of the WG did little to forge consensus on the matters of divergence, there were sporadic signs of willingness to compromise. However, such compromise is still short of detail and more work is needed.
The WG will continue deliberations at the next meeting which takes place in the week preceding the MEPC 85 in November this year. We expect new submissions to this 23rd meeting of the WG and we expect member states to pursue bilateral agreements on core issues in the interim.
It is therefore questionable if there is enough time to allow for a new or revised framework to emerge during MEPC 85 in the first week of December. What is positive, however, is that the MEPC 85 is not the end of the negotiation track. Negotiations will continue into 2027 and with time, consensus may prevail.
