The IMO Net-Zero Framework: Legal and Non-Legal Challenges for the GHG Pricing Component

In April 2025, the International Maritime Organization (IMO) approved the IMO Net-Zero Framework – a key global measure that is expected to drive reductions in the greenhouse gas (GHG) emissions produced by international shipping. The framework includes a pricing mechanism, which is embedded in a global fuel standard. This chapter analyzes key reasons why the inclusion of a GHG pricing mechanism in the IMO Net-Zero Framework has been one of the most contentious points of debate at the negotiations. The chapter highlights that GHG pricing mechanisms can be used to achieve different aims (e.g., flexibility, emissions reductions, revenue raising). Differences in proposals submitted for consideration to the IMO seem based at least in part on a preference for one aim over another. These differences in views on what GHG pricing should aim to achieve seem to have been at the core of the disagreement between states. In addition, there are various (potential) challenges related to implementing an IMO GHG pricing mechanism. This chapter looks at both legal (compatibility with MARPOL and WTO law) and non-legal challenges (e.g., impacts on states, revenue use, and the availability of alternative fuels) and discusses some potential ways forward to improve the IMO Net-Zero Framework.