How the IMO Mid-Term Measure Redraws the Shipping Net-Zero Map
A three-scenario quantitative analysis of how the IMO mid-term measure (Net-Zero Framework) reshapes carriers' fuel choices and shipping costs, and why a reward system and government policy are needed to drive an early transition.
This report uses a linear-programming cost-optimization model to analyze how the IMO mid-term measure (Net-Zero Framework), approved in April 2025, reshapes carriers' fuel choices and shipping cost structures. Reflecting a carbon-price (RU) structure that charges from $100 (Tier 1) to $380 (Tier 2) per tonne on emissions above the GFI (fuel greenhouse-gas intensity) standard, it compares fuel use, fuel costs, and the carbon levy through 2035 across three scenarios: non-compliance, base target, and enhanced target.
Non-compliance puts a heavy levy on high-carbon fuel, but current price levels are too low to induce a shift to zero-carbon fuels. In the cost-optimization model, the HFO share actually converges to 100% by 2035, showing that the market alone will not deliver the transition.
Base target balances a $100 per tonne levy with a gradual fuel switch. Drop-in biofuel (B30) expands to about 23% by 2035 and green ammonia to about 17.5% after 2032, making this the realistic starting point that balances policy acceptability and incentive effect.
Enhanced target meets the rules through early fuel switching alone, with no levy. Bio-methanol enters early and green ammonia scales up, producing the largest shift, yet the near-term total cost is the highest. The path that complies most faithfully ends up bearing the most cost, a regressive structure.
In short, the market alone cannot carry the transition. The price and trading rules for the Surplus Units (SU) granted to enhanced-target vessels must be specified quickly, giving early movers real reward and market predictability. Government should pursue a policy mix spanning zero-carbon fuel production and supply infrastructure, port supply chains, fuel-cost differential subsidies, tax measures, and green finance, taking the base target as the starting point and steering gradually toward the enhanced target. The mid-term measure is the first policy milestone toward 2050 shipping net-zero, and Korea should help design it from the front.
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