This week’s newsletter takes a closer look at a recent insight brief that explored the different plausible outcomes for the International Maritime Organization’s Net-Zero Framework.

The potential scenarios range from adopting the framework ‘as is’, to a single-tier fuel standard with lower compliance costs, and a scenario in which the economic elements included in the framework are removed altogether. As demonstrated in the table below, each will have materially different impacts on enforcement, investment signals, revenues, low-income countries, and regional policies.

The insight brief concludes that:

• Alternative scenarios currently on the table would provide little or no demand signal and revenue to support uptake of the scalable zero-emission fuels needed in the long run

• The alternatives to the NZF being discussed would still raise costs for lower income countries, but would severely limit the capacity to support their transitions and mitigate disproportionate impacts

• Alternative scenarios are more likely to encourage regulatory fragmentation, heightened investment risk, and decreased alignment with the IMO’s overall emissions-reduction strategy

• While the Net-Zero Framework is imperfect, many of these risk factors could be managed through the development of its guidelines for implementation