INTERNATIONAL MARITIME ORGANIZATION (IMO) – MARINE ENVIRONMENT PROTECTION COMMITTEE (MEPC) UPDATE

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Published: 1 May 2025

The IMO recently hosted the 83^rd session of the MEPC between 7 and 11 April 2025.

A major focus of this session was on obtaining an agreement on further implementation of the 2023 IMO Greenhouse Gas (GHG) Strategy. As such a new Chapter 5 of MARPOL Annex VI was approved by majority vote. For these amendments to be adopted, acceptance will be required from at least two-thirds of eligible parties at an extraordinary session of the MEPC in October 2025.

The proposed new regulations will apply to all ships greater than 5,000 gt (with some exceptions, such as ships trading only domestically). The first reporting period is planned to commence from 1 January 2028, utilising the IMO Data Collection System (DCS) once modified. The intricacies of this new regulation will require further analysis. However, the basics are described below.

Ships will be required to calculate the annual weighted average GHG Fuel Intensity (GFI) from the energy sources used on board. The GFI of each energy source will be determined on a Well-to-Wake (WtW¹) basis using data verified by an IMO approved process. The annual attained GFI of each ship will then be compared against a target GFI. For those ships with an attained GFI higher than the target, a negative compliance balance will exist, and “remedial units” will have to be bought or transferred from other ships to return the compliance balance to zero. Conversely, for ships that have attained a GFI lower than the target, a positive compliance balance will have been achieved, and ”surplus units” will be rewarded proportionally with an option to trade, bank, or give up any units earned.

The target GFI will reduce annually, providing more stringent requirements each year. The regulation introduces a two-tier approach to complying with the GFI target. The “base” target equates to a 4% reduction in year one, compared with the “direct compliance” target having a 17% reduction in year one.

• Should a ship’s attained GFI not meet the “direct compliance” target but exceed the “base” target, eg achieving a 10% reduction in year one, remedial units will need to be purchased at a lower cost (currently USD 100 per tonne of CO_2eq) to take account of missing the direct compliance target by 7% of GFI.
• However, should a ship’s attained GFI not meet the “base” target, e.g. achieving only a 2% reduction in year one, both lower cost (currently USD 100 per tonne of CO_2eq) remedial units to take account of missing the full 13% difference in target, plus higher cost (currently USD 380 per tonne of CO_2eq) remedial units to balance missing the base target by 2% of GFI, will need to be purchased.

This mechanism aims to increase the cost of high emission ships and incentivise low emission ships.

These annual target reductions mean that by 2035 the maximum allowable GFI, in terms of the direct compliance target, will be 43% less than the 2008 baseline.

Other highlights from this session include:

• A new emission control area under MARPOL Annex VI was approved. The North-East Atlantic ECA is expected to enter into force in 2027. The sulphur content of fuel used in this area will be limited to 0.10% by mass, 12 months after the date of entry into force (currently expected to be from 1 March 2028). The requirements for Nitrogen Oxide (NO_x) control will mean that any new ship contracted on or after 1 January 2027 will require to meet NO_x Tier III engine standards when sailing in this area.
• The text of circulars was agreed on the carriage of biofuel blends on conventional bunker ships and in-water cleaning of ship biofouling.
• There were also agreements and reports on the results of the review of Carbon Intensity Indicator (CII) regulations and the Ballast Water Management (BWM) Convention.

A useful summary of the main outcomes from the session can be found here.

For more information and interpretation of the upcoming regulations, shipowners should consult their classification society and/or flag state administration as appropriate.

Note that an extraordinary session of MEPC (ES.2) is currently planned to take place between 13 and 17 October 2025.

For further information, please do not hesitate to email lossprevention@tindallriley.com.

¹ WtW – where the impact of energy production, transport, distribution and use on board, including during combustion emissions, are taken into account.

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