Compliance Strategies and What They Would Cost

Once a regulation's numbers are fixed, compliance stops being a policy question and becomes an optimisation: for this ship, this year, what is the cheapest way to square the account?

These numbers are not fixed. Every figure below comes from the draft text MEPC 83 approved and MEPC 84 reopened, the tier prices are set for the 2028 to 2030 periods only, and one of the proposals now competing with the framework would remove the ZNZ reward and the Net-Zero Fund from the instrument entirely. Work the arithmetic anyway. It is the arithmetic any intensity-and-price regime will demand, an owner who cannot do it will be no readier when the text settles, and the alternative to a modelled number is usually an unexamined one. Just carry the outputs as a range with a condition attached, not as a quotation.

The framework offers four levers, and a sensible owner treats them as a portfolio, not a choice.

Lever one: change the fuel. Lower the attained GFI directly: biofuel blends first, since they need little or no ship modification; LNG or LPG where the tonnage already exists; ZNZ fuels as availability grows. Lever two: buy surplus units from over-compliant ships, remembering that they settle a Tier 2 deficit and nothing else. Lever three: pay: acquire remedial units at USD 100 (Tier 1) or USD 380 (Tier 2) per tCO2eq. Lever four: over-comply: run ZNZ fuel, collect Fund rewards, and sell the surplus units everyone else needs.

The tier prices discipline the whole portfolio. No abatement measure that costs more per tonne of CO2eq avoided than the tier it displaces is worth buying, because paying is always available at that price. USD 100 and USD 380 are not just penalties; they are the framework's published marginal price of carbon, and every lever gets measured against them. But levers two and three are not interchangeable, and the asymmetry from lesson 3 governs the portfolio: only lever one moves the Tier 1 bill, because only lever one can carry a ship under the direct compliance target.

An order-of-magnitude feel

Take the conventional fuel-oil ship from lesson 3 into 2028, attained GFI roughly at the 93.3 reference. Her Tier 2 band runs from 93.3 down to the 89.6 base target; her Tier 1 band from 89.6 down to the 77.4 direct compliance target. Work it per tonne of fuel, about 40,200 MJ in a tonne of fuel oil. The Tier 2 band is 3.7 g/MJ wide: about 150 kgCO2eq per tonne of fuel, costing roughly USD 57 at the 380 price. The Tier 1 band is 12.1 g/MJ wide: about 490 kgCO2eq, roughly USD 49 at the 100 price. Call it on the order of USD 105 per tonne of fuel in the first compliance year: a real number on a bunker bill, not a rounding error, but not yet a fleet-redefining one. That is a ship at the reference, roughly where high-sulphur fuel oil burned behind a scrubber lands on the IMO's initial default factors, at about 92.8. A VLSFO burner sits nearer 95.5 on the same table, which widens her 2028 Tier 2 band to about 5.9 g/MJ, some 240 kgCO2eq and USD 90 a tonne of fuel, and puts the first-year total nearer USD 140.

The sting is the trajectory, and it is worth being precise about which half of the bill moves. The Tier 1 band does not widen: it is the constant 12.13 gCO2eq/MJ gap between the ladders, so this ship owes roughly USD 49 per tonne of fuel in Tier 1 in 2028, in 2031 and in 2035 alike. What grows is Tier 2, because the base target keeps falling away beneath an attained GFI that has not moved. Run the same sum for 2035, where the base target is 65.3: the Tier 2 band is now 28.0 g/MJ, about 1,125 kgCO2eq per tonne of fuel, roughly USD 428 at the 380 price. Add the unchanged USD 49 and the bill is about USD 475 per tonne of fuel oil, four and a half times the 2028 figure, with the whole increase sitting in the expensive tier. Bureau Veritas publishes worked scenarios along these lines for tanker, container and LNG-carrier cases (BV Net-Zero Framework hub). That 2035 figure carries two caveats, both from lesson 3. USD 380 is an initial price fixed only for the 2028 to 2030 reporting periods, with the mechanism for setting it thereafter still to be agreed under regulation 36.10; and the whole schedule sits in a text nobody has adopted. Treat the later years as the shape of the problem, not as a quotation.

ClassNK's cost simulation of the mid-term measures draws the same shape: for a bulk carrier kept on fuel oil, the regulatory bill rises year on year until it rivals the fuel bill itself around the early 2030s, so the paper puts efficiency measures and slow steaming first and finds a growing role for biofuel blends through the 2030s, an economically rational route in the medium to long term (ClassNK Technical Journal). The corollary for LNG tonnage is sobering: a well-to-wake intensity in the mid-to-high seventies for a high-pressure engine, and in the eighties for a low-pressure one once methane slip is counted, clears Tier 2 comfortably in 2028. Against the 77.4 direct compliance line only the best high-pressure installations scrape under, and only in that first year; low-pressure tonnage sits above it from the start, and the margin goes on shrinking because the ladder moves and the fuel does not.

The sums above are deliberately per tonne of fuel, because that is the unit a chartering desk argues in. Doing them properly for a whole ship means building the attained GFI from each fuel's certified well-to-wake intensity and energy content, splitting the compliance balance into its two tiers, and pricing each one separately. That arithmetic is worked end to end, on a tanker carried through every regime and with the life-cycle emission factors that feed it, in our forthcoming course Compliance Calculations & Life-Cycle Emissions. If your next task is a number rather than a briefing, start there.

Two regimes on one voyage

Ships trading to Europe already run this playbook. FuelEU Maritime is a well-to-wake GHG intensity standard with pooling flexibility, structurally a sibling of the framework, and it prices non-compliance steeply. Lloyd's Register's comparison models a hypothetical ship's penalty exposure under both regimes out to 2050 and tabulates the design differences (LR Horizons). Two concept-level takeaways survive any modelling detail. First, the regimes would stack: nothing in the approved text turns FuelEU off, so a ship on EU trades keeps two books of account over the same fuel. Second, a compliance capability built for one, GFI accounting, blend management, pooling or unit trading, supplier certification, is most of the capability needed for the other. Our Maritime Regulations, Explained course covers FuelEU itself.

The discipline to build now, while the outcome is open: a per-ship GFI projection against both ladders, refreshed yearly; a marginal cost per tCO2eq for each lever, compared honestly against the tier prices; and the habit of treating the compliance year, not the ship's life, as the decision unit. Owners who ran that loop for FuelEU found the first year cheap and the fifth expensive. The framework, if it is adopted in something like its approved form, is built to the same curve. None of that loop is wasted if it is not.