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The 22nd session of the IMO Intersessional Working Group on Reduction of Greenhouse Gas Emissions from Ships (ISWG-GHG 22) took place in London from 1 to 4 September 2026.
The meeting continued negotiations on the IMO Net-Zero Framework (NZF) following ISWG-GHG 21 and MEPC 84 [read our analysis here]. At ISWG-GHG 22, discussions covered the draft MARPOL Annex VI amendments, implementation guidelines supporting the NZF, and the development of the IMO Life Cycle GHG Assessment (LCA) framework.
For the e-NG sector, the session confirmed a central point: the commercial value of renewable and low-carbon fuels will not be determined solely by the overall emissions reduction targets adopted by the IMO. Equally important are the technical rules that determine how fuels are certified, how emissions are calculated, how incentives are distributed, and which pathways qualify for support.
As negotiations move toward ISWG-GHG 23 and then MEPC 85, both expected before the end of 2026, these technical discussions will become central to investment decisions across the renewable methane value chain. Many of the NZF's most commercially significant elements, including fuel certification, lifecycle accounting, chain of custody rules and the design of incentives for zero and near-zero (ZNZ) fuels, remain under negotiation.
Our Policy Director, Rafik Ammar attended the ISWG-GHG 22 in full and tracked each of its workstreams. This is our read of what happened, what it means for e-LNG, and what comes next.
The agenda was structured around three main workstreams:
While much of the political attention was expected to focus on Agenda Item 2 and the overall architecture of the NZF, many of the decisions with the greatest commercial implications for ZNZ fuels would likely emerge from the more technical discussions under Agenda Items 3 and 4. In the event, neither item was reached: both were deferred in full to ISWG-GHG 23.
Day 1 focused on outstanding elements of the draft NZF, including the structure of the GFI mechanism and future reduction trajectories.
A notable development was the Group's willingness to take the adjusted GFI formula proposed by China (ISWG-GHG 22/2) as a basis for draft MARPOL Annex VI regulations, subject to two conditions:
The adjustment would express the attained annual GFI as the ratio of a ship's total net well-to-wake GHG emissions to the total energy it uses over a calendar year, replacing the current fuel-by-fuel formulation while retaining the underlying concept of emissions per unit of energy. Its stated purpose is a more generic reformulation, able to accommodate onboard carbon capture, shore power and renewable energy through guidelines rather than through repeated regulatory amendment.
The second condition is the one to watch. Keeping the reference to the 2024 LCA Guidelines inside the regulatory text, rather than moving it into guidelines, preserves lifecycle emissions accounting as a legal obligation, which is what protects pathways whose performance depends on verified lifecycle emissions. Support was not unanimous: some delegations preferred to retain the current fuel-by-fuel formulation, on the grounds that it offers greater clarity and predictability for industry.
Discussions also revealed growing divergence regarding the future economic element of the NZF. Several delegations raised the possibility of implementing the technical requirements first and addressing the economic mechanism later, a question the Group returned to later in the week and then deferred to ISWG-GHG 23 for want of time. For renewable fuel producers, this distinction is significant. The economic mechanism is expected to finance incentives for ZNZ fuels, and delaying it would postpone the revenue streams intended to support fuel deployment.
At the same time, debates on reduction trajectories highlighted a common tension throughout the week: how to balance a gradual introduction of requirements with the need for long-term investment certainty. Many delegations stressed that fuel production facilities require investment decisions several years before fuel demand materializes.
Day 2 focused on compliance mechanisms and generated one of the most consequential discussions of the session.
Delegations examined whether surplus units should be allowed to balance both Tier 1 and Tier 2 compliance deficits, rather than Tier 2 deficits only as the approved framework provides. There was broad support for the change. Presented as a flexibility measure for shipowners, it carries a direct consequence for ZNZ fuel incentives: as several delegations noted in the session, Tier 1 remedial unit revenue is the only certain source of revenue for ZNZ rewards and for just transition support. To the extent that a Tier 1 deficit can be settled with a surplus unit bought from another shipowner, that payment does not reach the Fund.
Several delegations argued that flexibility should not undermine investment signals for alternative fuels. The debate illustrated a broader challenge facing the IMO negotiations: ensuring that compliance flexibility does not weaken the economic incentives required to support new fuel production.
The session also brought renewed attention to how fuel availability should be assessed. It was suggested in discussion that fuels which are commercially interchangeable within the same bunkering infrastructure be assessed together, as a single fuel group. For methane-based pathways that would blur the distinction between fossil LNG, bio-LNG and e-LNG despite significant differences in lifecycle emissions: the availability of fossil LNG would establish the availability of the group. A separate proposal, which would remove the carbon source indicator from the Fuel Lifecycle Label (ISWG-GHG 22/4/1), was not reached at this session and goes forward to ISWG-GHG 23. The two operate at different points in the framework and have the same effect.
For renewable methane producers, preserving pathway visibility remains essential. If renewable and fossil methane become indistinguishable within key regulatory mechanisms, investment signals intended to support low-carbon pathways could be weakened.
The third day focused on the economic dimension of the NZF, including the future Fund or Facility and the design of incentives for ZNZ fuels. On the Fund itself, the general view was that the name of the mechanism matters less than its nature, purpose and functions, and interested delegations were invited to continue exploring concepts capable of building bridges. Two alternatives were on the table: replacing the IMO Net-Zero Fund with a lighter "Facility" relying on accredited international or national financial institutions operating under IMO oversight (ISWG-GHG 22/2/12), and a direct contribution scheme under which ships could comply by contributing to projects approved by the Organization (MEPC 85/7/1).
The most significant outcome was the Chair's suggestion that a dedicated ZNZ incentive be retained in principle at this stage, including through potential financial rewards. This represents an important signal for fuel producers, as the existence of a dedicated incentive mechanism remains central to supporting investment in alternative fuel production.
At the same time, discussions revealed growing interest in the use of multipliers as an incentive mechanism. While some delegations viewed multipliers as a complement to financial incentives, others suggested they could serve as an alternative to monetary support. This distinction is critical. A multiplier improves a shipowner's compliance position, but it does not provide a direct or financeable revenue stream for fuel producers. Some delegations expressed reservations about the multiplier approach or did not support it, on the grounds that it could generate additional surplus units, risk an oversupply that would reduce their value, and create an uncertain investment signal.
The question of differentiated support for specific pathways remains open. The draft ZNZ guideline modules before the session (ISWG-GHG 22/3) retain provisions that would allow certain categories of fuel to receive differentiated levels of support in the early years of implementation. Those modules were not reached and go forward to ISWG-GHG 23. For renewable methane pathways, how they are resolved will influence competitiveness through the market ramp-up period.
Importantly, several delegations emphasized that a smoother regulatory trajectory increases, rather than decreases, the need for dedicated support measures. As compliance obligations grow gradually, targeted incentives become even more important to encourage early investment in production capacity.
ISWG-GHG 22 did not resolve the major political questions surrounding the IMO NZF. Instead, it clarified where the most important debates will take place before MEPC 85. The final day was given to the Chair’s closing assessment and to approval of the report to MEPC 85. The Chair told delegations that the session had "laid out the concepts" and that the intersessional period was where they would need to "build bridges, not deepen trenches"; he also indicated that, in the absence of input reflecting genuine convergence, he may bring forward landing-zone text of his own. Formally, the Group invited interested delegations to consult intersessionally with a view to submitting concrete proposals reflecting enhanced convergence, and agreed to defer agenda items 3 and 4 to ISWG-GHG 23.
The session confirmed general support for maintaining the overall decarbonization architecture and reconfirmed the GFI calculation, reporting and verification architecture. Fundamental questions remain open on the design of the economic mechanism, the future of the Fund, the role of multipliers, and the allocation of revenues.
For the e-NG and e-LNG sector, perhaps the most important takeaway is that implementation details are no longer merely technical questions. Rules governing lifecycle emissions, certification, chain of custody, fuel classification and incentive allocation will directly shape the commercial viability of renewable methane fuels.
Many of these issues, and in particular the implementation guidelines and the LCA framework, were deferred in full to ISWG-GHG 23 without being discussed at this session. As a result, the next negotiating session will become decisive in determining how bio-LNG, e-LNG and e-NG are recognized, rewarded and deployed within the IMO NZF.
With only one further technical session before MEPC 85, the coming months will decide whether the NZF provides robust and investable conditions for renewable methane pathways and for their contribution to shipping decarbonization.
Ahead of ISWG-GHG 22, 35 documents were submitted to the session: 13 under agenda item 2, 18 under agenda item 3 and four under agenda item 4. Seven further documents submitted to MEPC 85 were referred to the Group for prior consideration. Together they revealed differences on the key elements of the package, from the greenhouse gas fuel intensity (GFI) reduction trajectory to the design of the economic mechanism intended to support the transition to low-emission fuels.
Five themes stood out across the 35 submissions.
Delegations remained divided on whether the IMO NZF should include a central fund financed through compliance payments, alternative funding arrangements, or primarily market-based mechanisms. That debate determines how support for ZNZ fuels is financed.
Proposals ranged from maintaining a strong early reduction pathway to introducing a softer start in the first years of implementation, while preserving longer-term decarbonization objectives.
A number of submissions focused on how fuels should be incentivized, including proposals for differentiated rewards, incentive multipliers, reverse auctions, and direct financial support schemes.
Several papers addressed how sustainable fuels should be certified and tracked. The definition of mass balance, traceability requirements, the treatment of interconnected gas infrastructure and registry design are all directly relevant to renewable methane pathways, which reach the ship through the gas grid rather than as discrete parcels. The principal papers were a work plan for the certification guidelines (ISWG-GHG 22/3/9), an information paper on book-and-claim practice for renewable electricity (22/INF.2) and a prototype traceability registry (22/INF.3).
Delegations also submitted proposals on methane emissions, upstream accounting methodologies, the use of actual versus default emission values, and the treatment of carbon sources within the life cycle assessment framework, including a proposal to remove the carbon source indicator from the Fuel Lifecycle Label (ISWG-GHG 22/4/1).
The submissions highlighted a wide range of positions among delegations.
For instance, a coalition of Pacific Island States advocated for a strong economic mechanism and ambitious decarbonization measures. The EU, Norway and several like-minded countries supported a robust framework combining emissions reductions with support for sustainable fuels.
Other delegations favored a more gradual implementation timeline, greater flexibility for industry, or alternative approaches centered on market-based compliance mechanisms. A number of oil- and gas-producing countries questioned the need for a central fund and advocated broader recognition of commercially viable fuel pathways.
ISWG-GHG 22 was expected to narrow those differences before the next negotiating phase later this year.
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For more information, contact Alexandra Popova at alexandra.popova@eng-coalition.org
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