Shipping decarbonisation regulation now runs on two clocks: EU ETS reached 100% allowance surrender for 2026 emissions and FuelEU Maritime completed its first verification cycle in H1 2026, while the IMO Net-Zero Framework awaits an adoption vote on 4 December 2026. That gap explains why 2026 ship orders are LNG-heavy and zero-carbon fuel orders have stalled.
What it is and how it works
Four instruments shape propulsion choice. EEXI and CII entered into force on 1 November 2022: EEXI is a one-off technical efficiency index and CII an annual operational rating. Resolution MEPC.400(83) of April 2025 fixed CII reduction factors for 2027-2030 at 13.625%, 16.25%, 18.875% and 21.5% against the 2019 reference, per Lex Dux.
EU ETS coverage rose to 100% allowance liability for 2026 emissions from 70% for 2025, with a EUR 100 per tonne non-surrender penalty on top of the obligation to surrender, per Oitha Marine. FuelEU Maritime, Regulation (EU) 2023/1805, regulates well-to-wake GHG intensity from 1 January 2025 with a penalty cited at EUR 2,400 per tonne of VLSFO-energy-equivalent above the limit, per Green Fuel Journal, and allows pooling of surplus across vessels.
The IMO Net-Zero Framework (NZF) sets a GHG fuel intensity metric in gCO2e/MJ well-to-wake against a 2008 reference of 93.3, as explained by the Global Maritime Forum. A base target starts at a 4% reduction in 2028 rising to 30% by 2035; a direct compliance target starts at 17% rising to 43%. Ships in the band between targets buy Tier 1 remedial units at USD 100/tCO2e and above the base target Tier 2 units at USD 380/tCO2e, while over-compliers earn tradable surplus units and fuels below 19 gCO2e/MJ qualify for fund rewards, per Vesselchain.
Why it matters now
Because European rules are live and the global price is not, owners optimise for Europe-only compliance. LNG with a low-slip engine, bio-LNG pooling and biofuel blends deliver the cheapest 2025-2030 route, which is why LNG took about 80% of alternative-fuel tonnage ordered in 2025 and 63-73% of 2026 alternative-fuel orders while methanol orders fell to two to four in H1 2026 and ammonia and hydrogen to four and one. Clarksons describes alternative-fuel ordering as having plateaued as regulations stall, per Seatrade Maritime, and DNV attributes slower H1 2026 orders to regulatory uncertainty. CII's fixed trajectory to 21.5% by 2030 means slow steaming, energy-saving devices and biofuel blending carry most of the burden for existing tonnage.
Key players and products
The IMO's Marine Environment Protection Committee (MEPC) and Maritime Safety Committee write the global rules; the European Commission administers EU ETS and FuelEU; class societies DNV, Lloyd's Register, ABS and ClassNK interpret them and verify compliance; Clarksons Research and DNV's Alternative Fuels Insight platform supply the ordering statistics. At the October 2025 extraordinary session, a Saudi proposal to adjourn NZF adoption by one year passed 57-49 with 21 abstentions, including Greece and Cyprus, and eight states absent, with the United States and a group of oil-producing states leading opposition, per Vinson & Elkins.
Figures that matter
| Metric | Value | Source type | Source |
|---|---|---|---|
| CII reduction factors 2027-2030 vs 2019 | 13.625%, 16.25%, 18.875%, 21.5% | regulatory | MEPC.400(83) via Lex Dux |
| EU ETS allowance liability | 70% of 2025 emissions; 100% of 2026 | regulatory | Oitha Marine; ABS |
| EU ETS non-surrender penalty | EUR 100 per tCO2e | regulatory | Oitha Marine |
| FuelEU Maritime penalty | EUR 2,400 per tonne VLSFO-equivalent | regulatory | Green Fuel Journal |
| NZF GFI reference and targets | 93.3 gCO2e/MJ; base 4% (2028) to 30% (2035); direct 17% to 43% | regulatory | Global Maritime Forum; Vesselchain |
| NZF remedial unit prices | USD 100/t Tier 1; USD 380/t Tier 2 | regulatory | Vesselchain |
| Ships on conventional fuel, May 2026 | 95% by tonnage; 99% by number | aggregator | DNV |
| Alternative-fuel-capable share | 47% of orderbook tonnage; 9.4% of fleet tonnage | aggregator | Clarksons Research |
Developments 2023-2026
- April 2025: MEPC 83 approves the Net-Zero Framework, adopts MEPC.400(83) on CII factors and MEPC.402(83) on methane-slip measurement, and identifies no gaps in the EEXI.
- October 2025: The second extraordinary MEPC session votes 57-49 to adjourn NZF adoption for a year.
- Late 2025: The European Commission publishes guidelines for reporting measured methane slip under FuelEU.
- January 2026: EU ETS moves to 100% surrender; phase 2 of the CII and EEXI review begins, running to spring 2027.
- H1 2026: FuelEU's first verification cycle for 2025 data triggers what Oitha Marine calls mild panic and a market for compliance pooling; sources conflict on whether pools may span different companies.
- April-May 2026: MEPC 84 leaves the NZF text unchanged and sets up an intersessional working group; support is described as having stabilised, per the Ammonia Energy Association.
- 30 November-4 December 2026: MEPC 85 followed by the resumed extraordinary session for the adoption decision; Hill Dickinson notes one analysis warning that the six-month circulation rule could push adoption into 2027.
Outlook
If the NZF is adopted on 4 December 2026 it enters into force about 16 months later, making 2028 the first GHG fuel intensity year; slippage to 2027 moves the first binding global year to 2029 or later. Clarksons expects more than 20% of fleet capacity to be alternative-fuel capable by 2030 either way. FuelEU's reduction trajectory and the 2023 IMO GHG Strategy checkpoints could not be sourced in the research and are not asserted here.
