Implementation work continues as regulatory clarity remains pending

While the Hormuz crisis has dominated headlines this month, the upcoming 84th session of the International Maritime Organization’s Marine Environment Protection Committee remains a key milestone for shipping decarbonisation. MEPC 84 is expected to continue work on implementation guidelines for the IMO Net-Zero Framework, following the approval of draft MARPOL Annex VI amendments at MEPC 83 in April 2025. These introduce a global fuel intensity standard and pricing mechanism. The guidelines will determine the compliance treatment of biofuels, LNG, and zero- and near-zero-emission fuels. Formal adoption was postponed at the extraordinary MEPC session in October 2025, where discussions were adjourned amid political divisions, including opposition from the United States.

Compliance costs are already differentiating fleet economics in European waters

Regulatory impact is already visible. Under the EU ETS phase-in, shipping companies in 2026 must surrender allowances for 70% of 2025 emissions, rising to 100% from 2027. Methane and nitrous oxide enter scope from 2026, increasing carbon costs for conventional vessels. Emissions exposure is therefore becoming a more direct driver of voyage economics.

Regulatory direction is clear even as the US position adds uncertainty

The IMO framework remains unresolved, but direction is clear. The U.S. position continues to pose a risk to the timeline given its opposition to a pricing mechanism. In parallel, EU ETS, CII, and FuelEU Maritime (in force from January 2025) are already driving commercial differentiation. For investors, this supports the case for modern, fuel-flexible tonnage, including vessels with future ammonia capability.