Greek shipowners back Panama Liberia plan as IMO faces net zero deadlock

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The Union of Greek Shipowners has backed a proposal led by Panama and Liberia as a more practical basis for global shipping decarbonisation rules, increasing pressure on governments to rethink the IMO Net Zero Framework ahead of negotiations in London from September 1 to 4.

UGS President Melina Travlos said the shipping industry remained committed to reducing greenhouse gas emissions but warned that regulatory targets must reflect the availability, affordability and scalability of lower carbon fuels.

Her intervention comes as International Maritime Organization member states prepare for another attempt to bridge substantial differences over the global measures that will determine how ships reduce emissions and how operators pay for failing to meet increasingly strict greenhouse gas intensity targets.

The September negotiations are the first of two intersessional meetings planned before the IMO’s Marine Environment Protection Committee meets again for MEPC 85 from November 30 to December 3.

Travlos said negotiations had exposed what the UGS considers significant weaknesses in the existing IMO Net Zero Framework.

“The course of the negotiations to date, however, has revealed significant weaknesses in the proposed IMO Net Zero Framework, which clearly is not the solution,” Travlos said.

The statement is significant because Greek controlled shipping represents one of the world’s largest merchant fleets, with particularly strong positions in tanker, dry bulk and gas shipping.

The UGS is not arguing against decarbonisation itself. Instead, its position focuses on how quickly regulation can move compared with the ability of fuel producers, ports, engine manufacturers and shipowners to supply and use alternative fuels commercially.

That distinction is becoming increasingly important as the IMO negotiations move from long term climate ambitions towards regulations that could directly affect vessel operating costs, fuel procurement and investment decisions.

The UGS said the approach advanced by Panama and Liberia provides what Travlos described as a “balanced and pragmatic foundation” for further negotiations, although she acknowledged that the proposal could still be improved.

The alternative approach places greater emphasis on linking greenhouse gas fuel intensity requirements to the demonstrated availability and commercial viability of lower emission fuels.

It also gives energy efficiency a prominent role in reducing emissions while alternative fuels remain scarce or expensive.

For shipowners, that issue goes directly to fleet investment. Operators can improve vessel performance through more efficient engines, propulsion systems, hull modifications, voyage optimisation and other technologies without waiting for a completely new global fuel supply system to emerge.

The question facing regulators is therefore increasingly practical: how quickly can mandatory fuel standards tighten if ships cannot reliably obtain compliant fuels at the ports where they trade?

Travlos said affordability, availability and scalability should be central to determining shipping’s decarbonisation pathway. She also pointed to Japan’s negotiating proposal as recognising similar constraints.

The IMO established the September working session after MEPC 84 agreed that further negotiations were necessary to address concerns surrounding the proposed global framework.

A second intersessional meeting is scheduled for November before MEPC 85.

The negotiations follow the adjournment of an extraordinary MEPC session in October 2025, when governments failed to secure sufficient agreement to formally adopt the Net Zero Framework amendments to MARPOL Annex VI.

Divisions have since remained over the structure and economic consequences of the proposed system.

The European Union and several other governments have continued to support strong global economic measures, while other countries have pushed for alternative mechanisms or slower implementation.

The Panama, Liberia and Argentina approach discussed during MEPC 84 proposed revisions to the Global Fuel Intensity mechanism and greater flexibility through measures including compliance credit trading, banking and limited borrowing.

The debate has therefore moved beyond whether international shipping should decarbonise. Governments are increasingly negotiating over who carries the cost, how compliance should be calculated and whether fuel availability should influence the pace at which emissions requirements become stricter.

For shipping companies, fuel supply remains one of the biggest uncertainties.

Ordering a vessel capable of operating on methanol, ammonia, LNG or another alternative fuel does not guarantee that sufficient quantities of that fuel will be commercially available throughout the ship’s trading network.

This creates a regulatory challenge for an industry whose assets routinely operate across multiple jurisdictions and continents.

Travlos argued that a single global system remains essential, rather than a patchwork of regional measures.

“We therefore call on IMO Member States to heed the voice of the industry for a global solution that will secure the necessary international consensus and combine environmental effectiveness, economic viability and social fairness,” she said.

The September negotiations will test whether those competing positions can move closer together before governments return to the IMO in November.

For shipowners considering vessels that could remain in service for 20 years or more, the outcome will influence decisions being made well before the final rules enter into force.