European Commissioner Apostolos Tzitzikostas made the announcement at Posidonia this week. Image Credit: European Commission

The European Union has decided shipping will not need to pay for both its own regional decarbonisation policy and the IMO's global system in the event of the Net-Zero Framework being adopted, removing a substantial question mark over how the regulations will interact.

Apostolos Tzitzikostas, the EU's commissioner for sustainable transport and tourism, made the announcement at the Posidonia International Shipping Exhibition 2026 in Athens this week.

"I also know that the overall energy transition entails costs," Tzitzikostas said.

"And here I want to be clear: European companies will not pay twice, both in Europe and in the IMO."

A spokesperson for the European Commission speaking to Ship & Bunker set out more detail on the policy.

"The EU believes that the most effective way to address climate impacts from maritime transport and ensure a level-playing field is through ambitious global action, which would implement the IMO 2023 Strategy target for international shipping to reach net-zero GHG emissions by 2050," the spokesperson said.

"We will pursue the work within the IMO and build bridges with international partners to work towards global solutions, supporting the commitment of the EU shipping sector to decarbonise and the investments already made towards achieving this goal. 

"The Commission will revise relevant EU legislation taking into consideration global measures at IMO in order to avoid double payment."

Major Cost Implications

Removing the possibility of the EU's decarbonisation compliance costs being paid for alongside IMO NZF costs significantly changes the economics of maritime decarbonisation.

Image Credit: Ship & Bunker

At present, one tonne of VLSFO at Rotterdam costs $709/mt, and comes with compliance costs on an intra-EU voyage of about $289.50 for the EU-ETS and $17.50 for FuelEU Maritime pooling.

In 2028, theoretically the first year where the mooted IMO NZF would come into effect, this global framework would add about $72 in penalty costs, taking the total for fuel, EU and IMO compliance to $1,088 per tonne of VLSFO, compared to $781 for just the fuel and IMO compliance. It should be noted here that in reality EU-ETS and FuelEU pooling costs are likely to be higher than current prices by 2028 because of a tighter biofuel and EUA market, meaning real compliance costs will be higher than the calculation above.

In 2030 the total cost would be even higher, because of the lower carbon intensity thresholds set by both FuelEU Maritime and the IMO NZF that year. FuelEU pooling would cost $56 per tonne of VLSFO that year, based on current prices, while NZF penalties would cost $130, leading to a total fuel and EU and IMO compliance cost of $1,184.50/mt, versus $839 for just fuel and IMO compliance.

The opposite calculation applies for those using biofuels or other low-carbon options, who would have their fuel purchases subsidised by selling overcompliance under the FuelEU pooling system and by selling surplus units under IMO NZF.

Image Credit: Ship & Bunker

At present, one tonne of B30-VLSFO at Rotterdam costs $954/mt, and comes with compliance costs on an intra-EU voyage of about $202.50 for the EU-ETS and revenues of $219 for FuelEU Maritime pooling.

In 2028, the IMO NZF would add about $113.50 in revenues from selling IMO surplus units, taking the net total for fuel, EU and IMO compliance to $824 per tonne of B30, compared to $840.50 for just the fuel and IMO compliance. 

In 2030 the total B30 cost for fuel, EU and IMO compliance would be $906 per tonne, versus $885 for just the fuel cost and IMO NZF compliance.

As can be seen, removing the possibility of double payment for both EU and IMO GHG compliance significantly reduces costs for fossil fuel consumption, while slightly raising costs for biofuels in 2028 and slightly lowering them by 2030.

More Details Needed

The news from the EU this week will be a welcome development for those feeling overwhelmed by decarbonisation regulation, but more details will be needed.

Commissioner Tzitzikostas did not set out detail in his speech on any timeframe for the EU's regulations for shipping to be lifted in the event of the IMO adopting the NZF, or on what form of IMO decarbonisation agreement would be sufficient for the EU to remove its rules.

The NZF in its current state is far from finalised, with a wide range of voices in the shipping industry expressing doubt that it can be adopted at the next MEPC meeting at the end of this year in its current form in the face of strong opposition from the US and other countries. If the IMO adopts a more watered-down version of the NZF later this year, the EU may not find this global regulation satisfactory, and it would be helpful to learn the EU's red lines on this issue before MEPC negotiations begin. 

It should also be noted that the EU-ETS is a significant source of revenues for the EU's budget, and member states may find it hard to agree to forgo the portion of revenues that come from shipping. 

But on this note, Commissioner Tzitzikostas made clear this week his support for these revenues to be used only for maritime decarbonisation projects, rather than for the EU budget more widely.

"I consider it self-evident that the revenues generated by shipping through the ETS must return to the sector, to finance clean fuels, new propulsion systems, technologies of the future," he said in his speech at Posidonia.