Maritime protection and indemnity (P&I) club Gard recently published an insight by Neil Henderson Senior Executive, Gard’s Industry Liaison, providing an overview of the interim measures agreed at MEPC 83 and outlined some of the reactions from the industry: 

On 11 April 2025 the IMO announced that agreement had been reached by the member states at MEPC 83 on interim measures as part of the IMO’s 2023 greenhouse gas (GHG) strategy to achieve net-zero by or around 2050. 

The proposed new chapter 5 to MARPOL Annex VI provides that the GHG intensity of all energy used by vessels – referred to as the GHG Fuel Intensity (GFI) – is to be progressively reduced. 

The measures will start from 1 January 2028 and apply to vessels of 5,000 gt or above.. There are two reduction trajectories: the more modest ‘Base’ target and the more ambitious ‘Direct Compliance’ target. These measures are intended to align with the IMO’s ‘base’ and ‘striving for’ GHG reduction targets 

If the vessel meets the more ambitious Direct Compliance target, the shipowner will receive surplus units (SUs). These can either be banked or transferred to other shipowners. By contrast, if the vessel fails to meet the required targets, the shipowner will have to purchase remedial units (RUs) at differing cost-levels, depending upon the degree of non-compliance.

The revenues from the RUs will be transferred to the IMO Net-Zero Fund, which will be managed by the IMO. This is intended, in part, to incentivise the use of zero and near-zero (ZNZ) fuels. The financial level of reward will be determined by 1 March 2027.

The MEPC will reconvene in October to adopt the proposal. This requires a two-thirds majority of the 108 Member State parties to MARPOL Annex VI, a total of 73 states. The majority voting in April saw 63 in favour, 16 opposed, and 24 abstentions; so, work will have to be done before October to secure the necessary additional support.

Fig.1 Trajectory for Base and Direct Compliance targets (2028-2035)

The basics of the GFI

The GHG Fuel Intensity (GFI) mid-term measures agreed are similar to but broader than the FuelEU Maritime Regulation. We will explore the similarities and differences in a subsequent article.

The GFI is the GHG intensity of the energy used onboard a ship. This comprises the energy from the fuel, from other sources, e.g. wind-assisted propulsion, and savings in emissions from technology such as carbon capture. The GFI is a measure of the grams of CO2 or CO2 equivalent, i.e. methane, nitrous oxide, per megajoule of energy; the unit is gCO2e/MJ. This is the same as the measure used for FuelEU Maritime.

Each energy source, whether it be fuel or alternative energy, is given a well-to-wake (WtW) figure for the GHG emissions. These are the GHG emissions throughout the lifecycle of the energy source: production – transportation – consumption onboard. The GFI figure for each fuel or energy source will be calculated by an IMO-recognised Sustainable Fuel Certification Scheme. 

Starting from 1 January 2028 there are two trajectories of reductions in the permitted GFI levels as compared to a 2008 starting figure. See Fig.1 above:

The ‘Base’ target which tracks the IMO’s base targets of a 20% reduction in GHG emissions by 2030 and 70% reduction by 2040; and 

The ‘Direct Compliance’ target. This tracks the ‘striving for’ targets of 30% and 80% reductions, respectively. 

The two target trajectories have been agreed up to 2035 only, other than a single Base target reduction of 65% for 2040. The targets for the period 2026 to 2040 must be agreed by 1 January 2032. 

By March each year, the shipowner will report the weighted average GHG intensity of the energy used onboard the vessel over the previous calendar year. This is the vessel’s Attained GFI. The shipowner will also report the vessel’s annual GFI Compliance Balance. This is the difference between the Direct Compliance target and the vessel’s Attained GFI, multiplied by the total energy used that year. It will be a positive or negative figure, measured in tonnes of CO2eq.

The reporting obligation applies to all vessels of 5,000gt or above, subject to several exceptions: ships operating only in the waters of their flag state; ships not using mechanical propulsion; FPSOs, FSUs, drilling rigs and semi-submersible vessels.

Note: The full article by Gard can be viewed here. 

Photo credit: Chris Pagan on Unsplash
Published: 2 June, 2025