Brazil’s IMO proposal for ISWG-GHG 22: how compliance, surplus trading, and the facility could work
The negotiations around the IMO Net-Zero Framework have moved into an interesting phase. Following the decision not to adopt the draft amendments to MARPOL Annex VI in October 2025, IMO Member States have spent much of 2026 considering how the framework could be adjusted without reopening the entire package negotiated at MEPC 83. Brazil’s contribution ...
Brazil has submitted a proposal to the Intersessional Working Group on Greenhouse Gas (ISWG-GHG) 22, aimed at addressing concerns in the upcoming IMO Net-Zero Framework. The proposal maintains several key elements of the current framework while proposing adjustments to improve compliance and flexibility for shipping companies.
The proposal keeps the global GHG fuel intensity standard and ship-level compliance balances, including Surplus Units, Remedial Units, and financial support for low-carbon fuels. It maintains the framework's structure as a flexible compliance system, where ships achieving required GHG intensity through their own means would not need to make payments. Instead, they can create transferable Surplus Units.
The proposal retains the two-tier compliance system, with the Base Target establishing a less stringent minimum trajectory and the Direct Compliance Target requiring deeper reductions. Ships would be measured against an annual GHG Intensity calculated on a well-to-wake basis, with targets expressed as percentage reductions against a reference value of 93.3 gCO₂eq/MJ. The two thresholds help prevent the market for transferable surplus from being the sole means of regulatory signal transmission.
Brazil also suggests a softer initial reduction trajectory, with the Base Target and Direct Compliance Target being the same for 2029 and 2030. This allows additional time for the IMO to establish necessary institutional systems. From 2031, the two targets diverge, with the long-term ambition increasing to 70% reduction in 2041. Surplus units would be tradable assets, creating an economic route for compliance when changing fuels or technologies is unavailable or unattractive.
Written by urgent.news from Hellenic Shipping News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
