MEPC 85: Tuvalu Proposes Stricter Net-Zero Rules With Higher Compliance Costs

The tiny Pacific island nation of Tuvalu has proposed the most stringent amendments to the Net-Zero Framework (NZF) for discussion at the upcoming Marine Environment Protection Committee (MEPC 85) meeting in November. The NZF, approved in April 2025, mandates ships over 5,000 GT to progressively lower their well-to-wake greenhouse gas emissions from 2028, with targets increasing from 4-17% in 2028 to 30-43% by 2035, based on a 2008 baseline of 93.30 gCO2e/MJ.

Tuvalu's proposal keeps the base targets the same but adjusts the 2028 compliance step from 4% to 6%, commencing in 2029. The direct compliance target would rise to 100% from 2029 through 2035, essentially turning the framework into a levy with no ship able to meet the criteria. This would effectively price every tonne of emissions, raising concerns about the economic impact on the shipping industry.

In addition, Tuvalu suggests raising the Tier 1 remedial unit price to $300/mtCO2e, tripling the previously agreed $100/mtCO2e. The Tier 2 remedial unit price for emissions surpassing the base target would remain at $380/mtCO2e. Importantly, the proposal eliminates the surplus unit mechanism, meaning ships exceeding GFI targets will not receive surplus units to sell to under-complying vessels. Instead, they must compensate via direct payments to the IMO Net-Zero Fund.

The proposal, co-submitted by Fiji, Kiribati, Nauru, Palau, Tuvalu, and Vanuatu at MEPC 84 in April, will be debated during the ISWG-GHG intersessional meetings in September and November. If approved, the amendments could be formally adopted at the MEPC's second extraordinary session, expected to reconvene on 4 December following its October adjournment.