Governments made progress in finalizing technical elements of the Net Zero Framework (NZF), the world’s first global carbon pricing for any pollutant, at working group (ISWG-GHG-21) negotiations on April 20-24 in London.
The International Maritime Organization (IMO) discussed the design and implementation of this major climate agreement, including clean energy and how to spend $10-$12 billion a year in revenue.
At the twenty-first meeting of the International Working Group on Global Warming, 62 countries, including Africa, Europe, Asia, South America and the Pacific, participated constructively in developing various elements around the framework’s guidelines. The majority of these countries (39) have specifically engaged in revenue collection and distribution, which is made possible by a carbon price. Among these countries were those that voted to delay the adoption of the resolution or abstained from voting last October. Several countries objected to the discussions, but only 4 countries explicitly refused to participate in topics related to carbon pricing. More information about the meeting can be found in the reading prepared by the UCL Energy Institute and available later on Friday 24 April.
Some delegates say the countries’ willingness to work together and move forward on designing the framework this week could be interpreted as a quiet act of resistance against Trump and the petrostates that remain staunchly opposed to the agreement.
In addition, countries also discussed safeguards to prevent the expansion of shipping into unsustainable biofuels, which experts and campaigners warn would have devastating impacts on the environment and food security, with discussion continuing next week.
Discussions will take place next week at political level on any changes to the structure of the New Zealand Fund (removing the revenue-raising carbon pricing component and/or weakening agreed limits for fossil fuel phase-outs), at the 84th session of the Marine Environment Protection Committee (MEPC 84) from 27 April to 1 May. The IMO has until November 2026 to discuss its adoption again.
Japan proposes to abolish the carbon price, against the interests of vulnerable countries that would lose access to vital finance. A group of largely oil-producing countries, including Saudi Arabia, the United Arab Emirates, Russia and Argentina, want to scrap the carbon pricing element, while also seeking to weaken agreed limits on the carbon intensity of fuels, which would prolong the use of fossil fuels. The United States rejects the New Zealand fund entirely.
Why the IMO meeting is important: The IMO is a battleground for countries to unite against the US and largely oil-producing nations to ensure the New Zealand framework is kept intact and adopted in its current form later this year. The NZF is key to helping move ships off volatile fossil fuels faster, lowering shipping fuel costs in the long term, and moving the industry closer towards meeting the climate targets to which countries have unanimously committed. Global shipping is seeing some of the biggest disruptions in recent years due to conflict in the Middle East, with the cost of bunker fuel doubling.
M Fenton, Senior Director of Climate Diplomacy at Opportunity Green, said: “The IMO negotiations this week were encouraging and productive on the technical guidelines that will accompany the Net Zero Framework. Developing countries in particular are playing an active and constructive role in shaping the NZF which will directly impact their economies and societies. Next week, the political stakes will be even higher. We call on all countries, especially the EU, to bring the same ambition and solidarity to the Marine Environment Protection Committee. A united and ambitious community The EU stands behind this framework It will be crucial in the face of expected geopolitical hostility, and it is important that the Marine Environment Protection Committee acts with the same spirit of solidarity and ambition to keep the New Zealand Fund alive – and the majority of countries that have fought for this must now stand firm.
Delaine McCullough, Chair of the Clean Shipping Alliance, said: “We are pleased to see IMO Member States actively engaged in working out the details of the Net Zero Framework, countering opponents’ claims that the IMO is a ‘house divided’. While we welcome the progress made, IMO Member States must stand on the line against those looking to disrupt and delay again. The NZF is imperfect, but the product of years of negotiation and compromise, and has broad support among IMO Member States.”
Jesse Fahnestock, Director of Decarbonisation at the Global Maritime Forum, said: “This week at the IMO we saw an encouraging willingness from both countries and industry to make progress on key guidelines for implementing the agreement. The transition to zero-emission shipping requires companies to develop strategic plans and start making investments today, but to do so they need a clear and reliable regulatory environment. Detailed and comprehensive guidance aligned with the IMO’s Greenhouse Gas Strategy – for example on emissions calculations and rewards for alternative fuels – can give companies the guidance they need And the confidence to invest in the transition to zero-emission technologies, and it is now important that the spirit of cooperation this week continues into next week.
“The decisions taken by the IMO over these two weeks are crucial to Africa’s economic and energy future, which can be demonstrated by the loud voice of African governments contributing meaningfully to shaping the guidelines for the Net Zero Framework,” said Dr. Dola Oloti, Senior Research Fellow in Energy and Transport Policy, University College London. “Many African countries are calling for the proposed multi-billion dollar net zero fund to be used to support Africa in recognition of the level of impact of the framework. Africa can become the world’s renewable energy exporter. The demand for a just transition is crucial to ensuring that the The net zero framework would disable them and as such, the fund is non-negotiable for its 1.4 billion people.
“When adopted, the Net Zero Framework will raise funds by penalizing non-compliance. The use of this revenue has long been a point of contention,” said Christian de Beukelere, Senior Lecturer in Culture and Climate, University of Melbourne. “This week, the vast majority of countries engaged constructively in discussions about the purpose and ways the Fund will manage and distribute these revenues. This signals support for adopting the NZF as it stands, which will help IMO regulations to ensure a fair and equitable transition.”
Jamie Yates, Director, Climate and Renewable Energy, Environment Pacific, said: “Member States concluded a productive week in London at IWG21, presenting key technical details of the Net Zero Framework and building broad consensus around the Net Zero Fund as one of its core pillars. Support came from all regions of the world, and the voices of Africa and the Pacific were particularly clear: the New Zealand Fund must remain the foundation for IMO’s climate action. Member States should heed this call.”
“Recent geopolitical instability may give the illusion that we are all reliant on fossil fuels, but that is simply not true: shipping can and must decarbonize,” said Anaïs Rios, chief shipping policy officer at Seas At Risk. “Next week, countries must come together to support a strong net-zero framework, including dedicated funding for those who need it most, and we are counting on the EU to stand united. Delaying or relaxing regulations designed to clean up shipping leads us down a dangerous path towards weak action.” This comes too late. The oceans, the climate, and ultimately the people will pay the price.
Michael Petroni, Policy Analyst, Climate Action Tracker, said: “Although in its current form the Net Zero Framework is the IMO’s most ambitious emissions reduction mechanism to date. It is likely to put shipping on a path to limit temperature rise to 2°C, if all other sectors follow the same level of action. It will be a crucial tool to drive the uptake of zero-emission fuels for the shipping industry. Without it, we are likely to see shipping emissions continue to rise until 2050. Further strengthening of the NZF framework is still needed For compatibility with a 1.5°C temperature compatible track.
“Biofuels may have a role to play in the shipping transition, but only when they are evaluated with real rigor,” said Aparajit Pandey, director of the Rocky Mountain Institute. “This means properly accounting for indirect land-use change and taking a comprehensive and careful view of their broader environmental and social impacts. Without that, there is a real risk of overestimating climate benefits and creating unintended consequences elsewhere.”
Madad McLean, Secretary General of ZESTAs, said: “The IMO debate on clean energy guidelines is not a technical footnote – these guidelines will form the core, laying the very foundations that will determine the effectiveness of the enormous work that has been done at the IMO on greenhouse gas emissions over the past years. They are the rules that determine which fuels will win. Get these principles wrong, and we are left with a generation of ships powered by fuels that look clean on paper but offer little to make the transition to Clean energy: Hydrogen is proven efficient and ready for expansion, but it cannot compete against faulty solutions backed by weak accounting methodologies. The opportunity is now open to correct this.
The New Zealand framework was approved in April 2025, but its adoption was postponed a few months later, in a close vote (57 in favor and 49 against), due to strong pressure from the United States and Saudi Arabia. The IMO has until November 2026 to discuss its adoption again.
The NZF is a key tool for shipping to be able to achieve the goals of the revised Strategy 2023: reaching net zero by 2050 in a fair and equitable way.
UCL’s latest analysis warns that removing the New Zealand Fund’s ability to collect revenues guaranteed by a carbon price would have serious negative impacts on the sector’s energy transition, and increase developing countries’ vulnerability to economic shocks. This is because not having a carbon price would mean increased fuel price volatility, slower adoption of clean energy, and a lack of revenues needed for a fair and equitable transition.
A study funded by container shipping giant CMA-CGM also found that decarbonising shipping under the NZF would ultimately be cheaper than the cost of inaction.
Source: Clean Shipping Alliance
