By ShipCalculators.com · Published 8 May 2026

Tier 1 Required GFI standard (MARPOL Annex VI Chapter 4 ter)

The Tier 1 Required GFI is the upper compliance bound of the two-tier GHG Fuel Intensity standard under MARPOL Annex VI Chapter 4 ter, the technical element of the IMO Net-Zero Framework approved at MEPC 83 in April 2025. It is the year-specific value of the well-to-wake GHG fuel intensity, expressed in grams of carbon-dioxide-equivalent per megajoule on a lower-calorific-value basis using AR5 GWP100 weighting, that defines the boundary between compliant operation without economic penalty and operation that triggers Tier 1 Remediation Unit (RU) surrender at the IMO-set RU price. A ship whose annually computed Attained GFI lies at or below the Required GFI for the reporting year is compliant in the Tier 1 sense and incurs no Tier 1 RU obligation. A ship whose Attained GFI exceeds the Required GFI must surrender Tier 1 RUs in proportion to the gCO2eq-per-MJ excess multiplied by the ship’s annual fuel-energy in megajoules, with payment routed through the IMO Net-Zero Fund. The Required GFI is derived directly from the indicative checkpoints of the 2023 Revised IMO GHG Strategy (Resolution MEPC.377(80)), translated into binding gCO2eq/MJ values along the GFI reduction trajectory 2027 to 2050 by Chapter 4 ter regulation 28ter, with reduction factors of 4 percent in 2027, 6 percent in 2028, 17 percent in 2030 and a final endpoint of 100 percent in 2050. Verification is annual through the IAPP renewal cycle. ShipCalculators.com hosts the GFI compliance calculator for end-to-end Tier 1 and Tier 2 obligation calculations and the GFI attained calculator for the upstream WtW computation from any fuel-mix.

Contents

Background and regulatory context

The Tier 1 Required GFI standard does not exist as a stand-alone instrument. It is the central numerical anchor of a layered compliance architecture introduced into MARPOL Annex VI by the addition of an entirely new chapter, Chapter 4 ter, on the prevention of GHG emissions from ships, approved at MEPC 83 in April 2025 and formally adopted at MEPC 84 in October 2025 under the tacit acceptance procedure of MARPOL Article 16. The chapter enters into force on 1 January 2027 and applies to every ship of 5,000 GT and above engaged on international voyages, the same scope as the existing Carbon Intensity Indicator (CII) and SEEMP Part III regulations of Chapter 4. Reading the Required GFI standard in isolation from this architecture produces misunderstanding; the standard is a parameter of a system, and the system has six tightly coupled components.

The first component is the Attained GFI, the ship-and-year specific well-to-wake GHG fuel intensity in gCO2eq/MJ, computed annually under the lifecycle accounting method of Resolution MEPC.391(82) on the data flowing from the existing IMO Data Collection System. The Attained GFI is the operational variable on which compliance is assessed.

The second component is the 2008 well-to-wake fleet-average baseline of 93.3 gCO2eq/MJ, the reference value codified in regulation 28ter as $\text{GFI}_{2008}$ and reconstructed from the Fourth IMO GHG Study. Every Required GFI value across 2027 to 2050 is a percentage reduction from this fixed baseline.

The third component is the 2023 Revised IMO GHG Strategy (Resolution MEPC.377(80)), the political envelope adopted at MEPC 80 in July 2023, which sets indicative and strive-for checkpoints at 2030, 2035, 2040 and 2050. The Strategy is not legally binding in itself; it acquires legal force only through translation into MARPOL amendments at MEPC 83.

The fourth component is the GFI reduction trajectory of regulation 28ter, the year-by-year schedule of reduction factors that translates the Strategy checkpoints into binding gCO2eq/MJ values for both the Tier 1 Required GFI and the Tier 2 Direct Compliance Threshold. The trajectory is exhaustively documented at GFI reduction trajectory 2027 to 2050.

The fifth component is the two-tier compliance model of regulation 29ter, the rule that every ship-year is classified into one of three states: direct compliance at or below the Direct Compliance Threshold, tiered compliance between the DCT and the Required GFI, or non-compliance above the Required GFI. Each state has different economic consequences described in section five below.

The sixth component is the economic remediation instrument, comprising the Tier 1 and Tier 2 Remediation Units, the Surplus Units issued to direct compliers, the IMO Net-Zero Fund through which RU revenues flow to least-developed countries and small island developing states, and the MEPC-set RU prices that determine the cost of a unit of excess gCO2eq/MJ. The Required GFI is the threshold that activates the Tier 1 surrender obligation; without that threshold, the economic instrument has no metric to act on.

The Required GFI is the locus where the political ambition of the Strategy meets the operational economics of the fleet. Setting it too high relative to the bunker-pool composition produces a stranded-asset and bunker-supply crisis; setting it too low produces a paper standard that fails to drive the fuel transition. The MEPC 83 calibration, described in detail in section three, is the negotiated balance between these two failure modes, and the calibration is what gives the Tier 1 standard its practical meaning at fleet level.

Definition of the Tier 1 Required GFI

The Tier 1 Required GFI for year $y$ , written $\text{GFI}_{\text{req}}(y)$ , is the year-specific value of the well-to-wake GHG fuel intensity, expressed in grams of carbon-dioxide-equivalent per megajoule on the lower-calorific-value energy basis defined in Resolution MEPC.391(82), at or below which a ship’s annually attained WtW GHG fuel intensity must lie to avoid the Tier 1 surrender obligation of regulation 29ter. The formal regulatory definition is given by regulation 28ter paragraph 2 in the form:

\text{GFI}_{\text{req}}(y) = \text{GFI}_{2008} \cdot (1 - r_1(y))

where $\text{GFI}_{2008} = 93.3$ gCO2eq/MJ is the codified 2008 well-to-wake fleet-average baseline and $r_1(y)$ is the year- $y$ Tier 1 reduction factor set out in the table of regulation 28ter paragraph 3 with linear interpolation between checkpoints under regulation 28ter paragraph 4. Three features of this definition deserve careful reading.

First, the Required GFI is expressed as a level, not as a reduction. Although it is derived from a reduction factor, the binding value for compliance is the level in gCO2eq/MJ. A ship operator does not need to track the reduction factor to demonstrate compliance; the operator needs the Attained GFI in gCO2eq/MJ and the Required GFI in gCO2eq/MJ for the same year, and compliance is the level-on-level comparison. This is a deliberate drafting choice. It avoids ambiguity in the surrender calculation, where the excess is computed in gCO2eq/MJ rather than in percentage points.

Second, the Required GFI is fleet-uniform, not ship-specific. Every ship of 5,000 GT and above is assessed against the same Required GFI for the same calendar year. The Required GFI does not vary with ship type, dwt, age, route, propulsion configuration or hull form. This contrasts with the existing CII regime, where the C, B, A category boundaries are dwt-and-type specific, and contrasts with the EEDI and EEXI regimes, where the required values are technical-design dependent. The fleet-uniform construction reflects the GFS design principle that decarbonisation is a fuel-intensity problem and not a ship-design problem; ships are penalised or rewarded on what they burn, not on how efficiently they burn it.

Third, the Required GFI is annual, not voyage-based or trip-based. The year- $y$ Required GFI applies to the calendar-year aggregate Attained GFI of every reporting ship for year $y$ . There is no concept of a voyage-specific Required GFI or of a trade-route-specific Required GFI. Within a calendar year a ship may operate any combination of voyages, fuels, ports and routes; the only quantity that matters at the Tier 1 surrender step is the calendar-year Attained GFI, and it is compared against a single calendar-year Required GFI value.

The verbal definition of the Tier 1 Required GFI is therefore: the upper compliance bound, fleet-uniform and annual, expressed in WtW gCO2eq/MJ on the MEPC.391(82) LCV-energy basis, derived from a fixed 2008 baseline by an MEPC-set reduction factor for the calendar year, exceeding which triggers Tier 1 RU surrender at the IMO-set RU price under regulation 29ter. Section three sets out exactly how that reduction factor is fixed for each year.

How the Required GFI is set each year, derivation from MEPC.377(80) Strategy checkpoints

The translation from the political checkpoints of the 2023 Revised IMO GHG Strategy to the binding Tier 1 reduction factors of regulation 28ter is a calibration step, not a mechanical formula. The Strategy expresses each checkpoint as a pair: an indicative reduction (the political minimum) and a strive-for reduction (the aspirational ambition). The checkpoint pairs in MEPC.377(80) are:

2030: at least a 20 percent reduction in WtW GHG intensity per transport work, striving for 30 percent
2035: at least a 43 percent reduction (single value, derived from the IPCC SR15 1.5 degC pathway)
2040: at least 70 percent, striving for 80 percent
2050: net-zero or close to net-zero (no separate strive-for figure)

The MEPC 83 compromise text adopts a structured calibration rule: the Tier 1 Required GFI uses the indicative level as a starting point, with year-specific glide-margins that relax the binding number relative to the indicative figure to reflect realistic bunker-pool capacity. The Tier 2 Direct Compliance Threshold uses the strive-for level on the same anchor years. Concretely, the Tier 1 reduction factors at MEPC checkpoints are set as follows:

2027: $r_1 = 4.00\%$ (entry-year calibration, set independently of any Strategy checkpoint, calibrated to the existing CII regime)
2028: $r_1 = 6.00\%$ (year-2 step, linear approach to the 2030 anchor)
2030: $r_1 = 17.00\%$ (slightly below the indicative 20 percent of MEPC.377(80), reflecting a three-percentage-point glide-margin on the baseline-rounding concession)
2035: $r_1 = 30.00\%$ (substantially below the indicative 43 percent of MEPC.377(80), reflecting the political compromise that the 2035 indicative is interpreted as a 30 percent binding number on the Tier 1 curve and the 43 percent number is migrated to the Tier 2 DCT 2030 anchor)
2040: $r_1 = 65.00\%$ (slightly below the indicative 70 percent of MEPC.377(80), reflecting a five-percentage-point glide-margin)
2050: $r_1 = 100.00\%$ (net-zero, matching the Strategy endpoint)

Non-checkpoint years receive their reduction factor by linear interpolation in reduction-factor space between the two adjacent checkpoint years, under regulation 28ter paragraph 4. The interpolation rule is:

r_1(y) = r_1(y_1) + \frac{y - y_1}{y_2 - y_1} \cdot \left( r_1(y_2) - r_1(y_1) \right)

where $y_1$ and $y_2$ are the closest checkpoint years bracketing $y$ . The interpolated reduction factor is rounded to two decimal places (basis points) before computing the Required GFI, and the resulting Required GFI is rounded to two decimal places of gCO2eq/MJ. Both rounding steps are written into regulation 28ter to remove ambiguity in the surrender calculation.

The sample 2027 to 2030 trajectory follows directly from these anchors. The 2029 reduction factor lies between 2028 ( $r_1 = 6.00\%$ ) and 2030 ( $r_1 = 17.00\%$ ):

r_1(2029) = 0.06 + \frac{2029 - 2028}{2030 - 2028} \cdot (0.17 - 0.06) = 0.06 + 0.5 \cdot 0.11 = 0.115

so $r_1(2029) = 11.50\%$ and the 2029 Required GFI is $93.3 \cdot (1 - 0.115) = 82.57$ gCO2eq/MJ. Applying the same arithmetic to every year produces the published 2027 to 2030 Tier 1 table:

Year	$r_1(y)$	Required GFI (gCO2eq/MJ)	Source of anchor
2027	4.00%	89.57	Entry-year calibration
2028	6.00%	87.70	Year-2 step
2029	11.50%	82.57	Linear interpolation 2028 to 2030
2030	17.00%	77.44	Strategy 2030 indicative checkpoint, glide-adjusted

The 2027 to 2030 window is the most operationally important window for the entire trajectory, because it is the period during which the Tier 1 standard transitions from a non-binding aspiration to a binding constraint. The 2027 entry value of 89.57 gCO2eq/MJ is achievable for a ship burning a clean MDO-heavy bunker mix without any drop-in alternative fuel. The 2028 value of 87.70 gCO2eq/MJ remains within reach of conventional fossil fuel optimisation. The 2030 value of 77.44 gCO2eq/MJ is the first year where conventional VLSFO operation alone, at a typical fleet-average WtW intensity around 91 gCO2eq/MJ, lies clearly above the Required GFI and triggers Tier 1 RU surrender for any uncorrected ship.

The full 2027 to 2050 table for both Tier 1 and Tier 2 is the subject of GFI reduction trajectory 2027 to 2050; the present article concentrates on the Tier 1 layer specifically.

Surrender mechanics for ships above the Required GFI

A ship whose Attained GFI for the reporting year exceeds the Required GFI for the same year is in the Tier 1 RU surrender state under regulation 29ter. The surrender is a quantitative obligation, not a categorical penalty: the magnitude of the obligation scales linearly with the magnitude of the excess and with the ship’s annual fuel-energy. The surrender quantity is computed in three steps.

Step one: compute the excess intensity. The excess of the Attained GFI over the Required GFI is:

\Delta\text{GFI} = \max(0,\ \text{GFI}_{\text{att}} - \text{GFI}_{\text{req}})

The maximum-with-zero is mathematically essential. A negative excess (Attained GFI below Required GFI) does not produce a surrender obligation; it produces no obligation at all. The Surplus Unit issuance is governed by a separate calculation against the tighter Tier 2 DCT, and the Tier 1 calculation has nothing to say about it. A ship whose Attained GFI is exactly equal to the Required GFI is at the boundary, with $\Delta\text{GFI} = 0$ and no surrender obligation.

Step two: convert excess intensity to total excess emissions. The excess intensity in gCO2eq/MJ is multiplied by the ship’s total annual fuel-energy in MJ to produce the absolute excess in gCO2eq, and divided by $10^6$ to convert from grams to tonnes:

\text{RU obligation (tCO}_2\text{eq)} = \frac{\Delta\text{GFI} \cdot E_{\text{total}}}{10^6}

where $E_{\text{total}}$ is total annual energy (MJ) drawn from the IMO DCS reporting under MARPOL Annex VI Chapter 4 Regulation 27. The conversion is exact and does not involve any further factor. The unit obligation is in tonnes of CO2-equivalent, the same unit as the EU ETS allowance and the FuelEU Maritime compliance balance, which simplifies inter-system comparison but does not imply substitution of one obligation by another.

Step three: surrender Tier 1 RUs at the MEPC-set price. The number of Tier 1 RUs to be surrendered equals the RU obligation in tCO2eq, with one RU representing one tCO2eq. The cash cost of compliance is the RU obligation multiplied by the MEPC-set Tier 1 RU price for the year, expressed in USD per tCO2eq. The Tier 1 RU price is set by an MEPC procedure on a year-ahead basis, with the MEPC delegating numerical fixation to a sub-committee that monitors the international carbon price benchmark and the IMO Net-Zero Fund balance. The Tier 1 price is higher than the Tier 2 RU price, by design, because the Tier 1 price applies to ships above the Required GFI (the upper compliance bound) while the Tier 2 price applies to ships in the band between the DCT and the Required GFI. A two-tier price structure produces a marginal-cost incentive that increases as the ship deviates further from direct compliance.

The surrender is administratively executed through a registry system maintained by the IMO Secretariat. Ship operators hold an account at the registry. RUs are purchased from the IMO Net-Zero Fund at the MEPC-set price, with revenues earmarked for least-developed countries and small island developing states under regulation 30ter. RUs may also be purchased on the secondary market from operators holding excess Surplus Units, subject to the conversion ratios set by the MEPC. The surrender deadline is the second quarter of the year following the reporting year, with the first surrender deadline falling in the second quarter of 2028 against 2027 emissions.

A worked numerical illustration of the surrender mechanic is given in section seven. At this point the practical reading is: the Tier 1 standard is not a binary pass-or-fail rule but a price-on-excess rule, with the price set by the MEPC on a year-ahead basis and the quantity set by the ship’s actual operational performance against the year’s Required GFI.

Relationship to Tier 2 (Direct Compliance Threshold), the band of “compliant without RU”

The Tier 1 Required GFI is the upper bound of the compliance band. The Tier 2 Direct Compliance Threshold (DCT) is the lower bound. Together they partition the gCO2eq/MJ axis into three zones with distinct economic consequences.

Zone A: Attained GFI at or below the DCT. This is the direct compliance zone. A ship in this zone is in direct compliance under regulation 29ter paragraph 1 and receives Surplus Units (SUs) in proportion to the gap between the DCT and the Attained GFI multiplied by the annual fuel-energy. SUs may be banked, sold to other operators or used to offset future Tier 2 RU obligations on the same ship. SU revenue is the principal financial reward for early-mover capital deployment in alternative fuels.

Zone B: Attained GFI above the DCT but at or below the Required GFI. This is the tiered compliance zone. A ship in this zone is technically compliant in the sense that no Tier 1 surrender obligation applies, but it must surrender Tier 2 RUs in proportion to the gap between the Attained GFI and the DCT multiplied by the annual fuel-energy. The Tier 2 RU price is lower than the Tier 1 RU price, reflecting the lower regulatory severity of being inside the band rather than outside it. A ship in zone B has the smallest cash cost of compliance per tonne of excess but no SU revenue; a ship just above the DCT pays a small amount, a ship just below the Required GFI pays a larger amount but still less than the Tier 1 price would imply.

Zone C: Attained GFI above the Required GFI. This is the non-compliance zone in the Tier 1 sense. A ship in this zone must surrender Tier 1 RUs in proportion to the gap between the Attained GFI and the Required GFI multiplied by the annual fuel-energy, at the higher Tier 1 price. The ship continues to owe Tier 2 RUs on the entire gap from the Attained GFI down to the DCT, structured as a two-component payment: Tier 1 RUs on the (Required GFI to Attained GFI) excess and Tier 2 RUs on the (DCT to Required GFI) gap. The cumulative cash cost of zone C operation is therefore strictly greater than zone B operation, by an amount equal to the (Tier 1 price minus Tier 2 price) multiplied by the (Attained GFI minus Required GFI) excess multiplied by annual fuel-energy.

The three-zone structure is described in greater algebraic detail in Marine GFS methodology. The point relevant to the present article is the framing of the Required GFI as the upper compliance bound: not the cliff above which compliance is impossible, but the threshold above which the marginal cost of an additional gCO2eq/MJ of intensity sharply rises. The Required GFI does not partition the world into compliant ships and non-compliant ships in the bare regulatory sense (a ship in zone C is still operating lawfully under MARPOL Annex VI as long as it surrenders the requisite RUs); it partitions the world into ships that pay the lower Tier 2 marginal price and ships that pay the higher Tier 1 marginal price.

The quantitative band width is dynamic. The 2027 band width (Required GFI 89.57, DCT 77.44) is approximately 12 gCO2eq/MJ, which is small enough that the practical question for most early-year operators is whether to invest in a fuel mix that comfortably undershoots the DCT or to accept Tier 2 RU surrender on a small excess. The 2035 band width (Required GFI 65.31, DCT 32.66) is approximately 33 gCO2eq/MJ, the largest of the entire trajectory, which produces a wide tiered-compliance zone in which significant Tier 2 RU surrender is possible without crossing into zone C. By 2045 the band has narrowed back to about 7 gCO2eq/MJ as both curves converge on the 2050 net-zero anchor.

Per-ship application: the IAPP renewal verification cycle

The Tier 1 Required GFI standard is operationalised at the level of the individual ship through the IAPP renewal verification cycle. The International Air Pollution Prevention (IAPP) certificate, issued under MARPOL Annex VI Regulation 6, is the existing certification instrument that records a ship’s compliance with the air-pollution-prevention regulations of Annex VI. The IAPP is issued for a maximum five-year period and is renewed at the IAPP renewal survey under Regulation 5. Chapter 4 ter integrates GFS verification into the IAPP renewal cycle by adding a new statutory survey item: the verifier confirms that the ship has computed the Attained GFI annually, surrendered the requisite RUs against the Required GFI for each reporting year covered by the certificate, and received any due Surplus Units against the DCT.

The verification cycle has three operational phases.

Phase one: annual reporting. The ship’s Attained GFI for calendar year $y$ is computed from the IMO DCS data submitted by 31 March of year $y+1$ . The verifier (typically the flag-state administration or a recognised organisation acting on its behalf) confirms the Attained GFI calculation against the underlying fuel-consumption and pathway data. The Attained GFI for year $y$ is then compared against the Required GFI for year $y$ (regulation 28ter table value) and the DCT for year $y$ (regulation 28ter parallel curve). The comparison produces a numerical determination of zone A, B or C for year $y$ , and the corresponding Tier 1 RU obligation, Tier 2 RU obligation or SU entitlement is recorded in the IMO Net-Zero Fund registry.

Phase two: surrender or issuance. The ship operator surrenders the required Tier 1 and Tier 2 RUs to the IMO Net-Zero Fund registry by 30 June of year $y+1$ , financed through cash purchase from the IMO Fund at the MEPC-set price, secondary-market purchase of SUs from over-compliant ships or banked SUs from prior years on the same ship. Surplus Unit issuance occurs at the same date for ships in zone A. Failure to surrender by the deadline triggers a non-compliance flag in the registry that suspends the ship’s IAPP renewal until the surrender is rectified.

Phase three: IAPP renewal verification. At the IAPP renewal survey, the verifier confirms that the ship has discharged its surrender obligations for every reporting year since the previous IAPP renewal. A ship with outstanding Tier 1 or Tier 2 surrender obligations cannot receive a renewed IAPP certificate; the ship is then ineligible for international voyages under MARPOL Annex VI until the surrender is completed. The IAPP renewal is therefore the enforcement choke-point of the GFS regime: the annual surrender deadline is administrative, but the IAPP renewal turns non-surrender into a categorical operating restriction.

The first IAPP renewal verification of GFS compliance is required at the next IAPP renewal on or after 1 January 2027. Ships with IAPP certificates issued in 2022 or later therefore face their first GFS verification at the renewal due in 2027 to 2032, with the precise year determined by the original issue date. Operators are advised to plan for the first GFS verification to fall within the 2028 to 2030 window for most of the existing fleet.

Formula, assumptions, and limits

Formula

The Tier 1 Required GFI for year $y$ is given by:

\text{GFI}_{\text{req}}(y) = 93.3 \cdot (1 - r_1(y)) \quad \text{[gCO2eq/MJ]}

with $r_1(y)$ taking the values 0.04 in 2027, 0.06 in 2028, 0.17 in 2030, 0.30 in 2035, 0.65 in 2040 and 1.00 in 2050, and intermediate years computed by linear interpolation between adjacent anchors.

The Tier 1 Remediation Unit obligation for a ship with Attained GFI $\text{GFI}_{\text{att}}$ and total annual fuel-energy $E_{\text{total}}$ in MJ is:

\Delta\text{GFI} = \max(0,\ \text{GFI}_{\text{att}} - \text{GFI}_{\text{req}}(y))

\text{RU obligation (tCO}_2\text{eq)} = \frac{\Delta\text{GFI} \cdot E_{\text{total}}}{10^6}

The cash cost of Tier 1 compliance is the RU obligation multiplied by the MEPC-set Tier 1 RU price in USD per tCO2eq for year $y$ .

Derivation

The Required GFI formula derives from the percentage-from-baseline architecture of regulation 28ter. The political input is the 2008 fleet-average WtW intensity reconstructed at 93.3 gCO2eq/MJ from the Fourth IMO GHG Study, codified in the regulation as the constant $\text{GFI}_{2008}$ . The temporal input is the year-specific reduction factor $r_1(y)$ , which is itself the linear-interpolation output of the MEPC-checkpoint reduction factors 4 percent (2027), 6 percent (2028), 17 percent (2030), 30 percent (2035), 65 percent (2040) and 100 percent (2050). Multiplying the fixed baseline by $(1 - r_1(y))$ produces the year- $y$ Required GFI in absolute gCO2eq/MJ on the same WtW basis as the Attained GFI computation, which guarantees that the level-on-level comparison at the surrender step is performed in consistent units.

The RU obligation formula derives from the principle that the Tier 1 instrument prices excess intensity at the marginal cost per unit of WtW emission. The intensity excess in gCO2eq/MJ multiplied by the energy throughput in MJ produces total excess emissions in gCO2eq, which is the natural unit for any market-based instrument. The factor of $10^6$ is the unit conversion from grams to tonnes; one tonne CO2-equivalent is one Tier 1 Remediation Unit by regulatory definition.

Assumptions

The Required GFI standard rests on five assumptions, each codified in either regulation 28ter or the underlying MEPC.391(82) LCA Guidelines.

Assumption one: the 2008 baseline is fixed at 93.3 gCO2eq/MJ for the duration of the trajectory. The baseline does not update with revised IMO GHG Study results, with bunker-pool composition changes or with revised MEPC.391(82) defaults. Only a formal MEPC resolution can revise the baseline, and the MEPC has signalled that revision is reserved for the five-yearly review under regulation 31ter.

Assumption two: the Strategy checkpoint reduction factors are fixed at the MEPC 83 calibration. A revision is possible at any five-yearly review, but in the interim the table of regulation 28ter is binding. The 2030 anchor is 17 percent, the 2035 anchor is 30 percent, the 2040 anchor is 65 percent and the 2050 anchor is 100 percent.

Assumption three: the Attained GFI is computed on the MEPC.391(82) WtW LCV-energy basis with AR5 GWP100 weighting. The Required GFI is defined on the same basis. Comparison across different LCA conventions (TtW only, GWP20 weighting, HHV-energy basis) is meaningless and the standard cannot be applied across such conventions without explicit conversion.

Assumption four: the Required GFI is fleet-uniform. No ship-type, age, dwt or route correction applies. The calibration of the Required GFI implicitly assumes that the international fleet, taken as a whole, can converge on the Required GFI by changing fuel mix; the calibration does not assume that any individual ship can do so.

Assumption five: the linear-interpolation rule applies in reduction-factor space, not in gCO2eq/MJ space. Because the baseline is a constant, the two formulations produce identical numerical results and the regulation could equally have been written either way.

Worked example

Consider a 65,000 dwt Panamax bulk carrier operating in calendar year 2028. The ship burns 12,500 tonnes of VLSFO at WtW intensity 91.0 gCO2eq/MJ on a LCV of 41,000 MJ/t, producing total annual energy:

E_{\text{total}} = 12{,}500 \cdot 41{,}000 = 5.125 \times 10^8\ \text{MJ}

The ship also burns 600 tonnes of B30 biofuel blend at WtW intensity 60 gCO2eq/MJ on a LCV of 40,500 MJ/t, contributing:

E_{\text{B30}} = 600 \cdot 40{,}500 = 2.43 \times 10^7\ \text{MJ}

Total annual energy is $E_{\text{total}} \approx 5.368 \times 10^8$ MJ. Energy-weighted Attained GFI:

\text{GFI}_{\text{att}} = \frac{91.0 \cdot 5.125 \times 10^8 + 60 \cdot 2.43 \times 10^7}{5.368 \times 10^8} \approx 89.6\ \text{gCO2eq/MJ}

The 2028 Tier 1 Required GFI is 87.70 gCO2eq/MJ. The excess is:

\Delta\text{GFI} = \max(0,\ 89.6 - 87.70) = 1.90\ \text{gCO2eq/MJ}

The Tier 1 RU obligation is:

\text{RU obligation} = \frac{1.90 \cdot 5.368 \times 10^8}{10^6} = 1{,}020\ \text{tCO}_2\text{eq}

At a notional 2028 Tier 1 RU price of 250 USD per tCO2eq, the cash cost of Tier 1 compliance is approximately 255,000 USD for the year. The ship continues to owe Tier 2 RUs on the gap between the DCT (73.71 gCO2eq/MJ in 2028) and the Required GFI (87.70 gCO2eq/MJ in 2028), at the lower Tier 2 RU price; the worked Tier 2 calculation is set out in Marine GFS methodology. The combined Tier 1 plus Tier 2 cash cost is the operationally relevant figure for the Panamax operator.

Edge cases and limits

The Required GFI standard has four edge cases that warrant explicit treatment.

Edge case one: sub-5,000 GT ships. The standard does not apply to ships below 5,000 GT, regardless of their actual GFI. A 4,500 GT general-cargo ship operating internationally can burn pure HFO at a WtW intensity above 100 gCO2eq/MJ without any Tier 1 obligation, although this exemption is subject to revision at the five-yearly review.

Edge case two: domestic voyages. The standard applies only to ships engaged on international voyages under MARPOL Annex VI. A domestic ferry operating exclusively within one flag state’s waters is outside the scope of the Required GFI, although it remains subject to flag-state air-pollution regulations.

Edge case three: zero-fuel periods. A ship that consumes zero fuel in a calendar year (laid up, in long-term maintenance) has an undefined Attained GFI by zero-division. Regulation 29ter paragraph 5 provides that a ship with $E_{\text{total}} = 0$ has zero Tier 1 RU obligation by construction, with the Attained GFI treated as not applicable rather than as a limit.

Edge case four: novel-fuel pathways without MEPC.391(82) defaults. A ship burning a fuel pathway without a published MEPC.391(82) default factor must use a Sustainability Certification Scheme certified pathway-specific WtW factor or, in the absence of certification, a conservative upper-bound default. The Required GFI itself does not change; only the Attained GFI computation is affected.

The standard has two material limits. The first is that the Required GFI is a fleet-average instrument applied at ship level: a ship that exceeds the Required GFI is not necessarily a poorly performing ship in any absolute engineering sense, but a ship whose chosen fuel mix exceeds the year’s fleet-average pathway. The second is that the Required GFI does not address absolute emissions: a fleet that runs flat against the Required GFI for every year of the trajectory delivers exactly the intensity reduction of the trajectory, but the absolute tonnage of CO2eq depends on the total fuel-energy throughput, which in turn depends on trade volume and on transport-work growth. The Required GFI is a fuel-intensity instrument, not an absolute-emissions instrument, and the Strategy is explicit that the absolute-emissions outcome is governed by the combined effect of the GFS, the parallel growth in zero or near-zero fuel availability and the secular evolution of trade demand.

Regulatory basis

The Tier 1 Required GFI standard is established by:

MARPOL Annex VI Chapter 4 ter regulation 28ter: definition of $\text{GFI}_{2008}$ , the table of $r_1(y)$ at MEPC checkpoints, the linear-interpolation rule and the rounding conventions
MARPOL Annex VI Chapter 4 ter regulation 29ter: the surrender obligation, the calculation of the RU obligation, the Tier 1 and Tier 2 price differentiation, the surrender deadline and the IAPP-renewal verification linkage
Resolution MEPC.391(82): the WtW LCA accounting method, the AR5 GWP100 weighting, the LCV-energy basis and the default emission factors per fuel pathway
Resolution MEPC.377(80): the Strategy checkpoints from which the Tier 1 reduction factors are derived

Implementation guidance is provided through MEPC unified interpretations and through the IMO Net-Zero Fund operating procedures, both adopted at MEPC 84 in October 2025 and updated as needed at subsequent MEPC sessions.

Common errors

Five common errors recur in early industry implementation.

Error one: comparing Attained GFI on a TtW basis against a WtW Required GFI. The Required GFI is WtW; the Attained GFI must be WtW. Using TtW Attained GFI produces a misleadingly low number that systematically understates the surrender obligation.

Error two: applying a CII-style ship-type correction to the Required GFI. The Required GFI is fleet-uniform. A bulk-carrier operator who attempts to correct the Required GFI by a ship-type factor is not implementing the standard correctly; the correction belongs in the Attained GFI computation if anywhere, through the choice of fuel mix and operational profile.

Error three: confusing the Required GFI with the DCT. The Required GFI is the upper bound; the DCT is the lower bound. Operating at the Required GFI is compliant in the Tier 1 sense but generates Tier 2 RU surrender on the gap between Required GFI and DCT; operating at the DCT generates Surplus Units. The two thresholds are not interchangeable.

Error four: pricing the surrender at an EU ETS or FuelEU price. The Tier 1 RU price is set by the MEPC and is denominated in USD per tCO2eq; it is not the EU ETS allowance price or the FuelEU Maritime penalty price, although the units are the same. Inter-system price comparison is meaningful for hedging strategy but not for direct surrender computation.

Error five: treating the Required GFI as fixed beyond 2050. The trajectory is defined to 2050, with the 2050 endpoint at $r_1 = 1.00$ producing a Required GFI of 0.00 gCO2eq/MJ. The MEPC has indicated that the post-2050 trajectory will be established through future Strategy revisions and is not in force by inheritance from the 2027 to 2050 table.

Operational planning implications

The Tier 1 Required GFI standard reshapes three categories of operational decision: fuel-mix planning, charter-party fixings and capital allocation under RU price uncertainty.

Fuel-mix planning. The 2027 entry value of 89.57 gCO2eq/MJ is achievable by clean conventional operation, but the 2030 value of 77.44 gCO2eq/MJ is below the WtW intensity of typical VLSFO, so a ship operating exclusively on VLSFO from 2030 onward has a structural Tier 1 RU obligation. Three fuel-mix strategies bring a ship below the 2030 Required GFI: blending low-WtW biofuels (B30 to B100) into the conventional bunker mix, switching to LNG (around 76 gCO2eq/MJ on AR5 GWP100, just below the 77.44 threshold), or installing a methanol or ammonia dual-fuel capability and bunkering certified low-carbon variants. The economic optimum depends on the regional bunker pool, the ship’s voyage pattern and the relative price of conventional and alternative fuels at each refuelling port.

Charter-party fixings. Time-charter and voyage-charter contracts entered after 1 January 2027 must allocate the GFS compliance cost between owner and charterer. The Tier 1 RU obligation is a pass-through cost in most charter forms, conventionally borne by the charterer who specifies the fuel mix, but the operational reality is more complex when bunker delivery decisions are made by the ship’s master under operational pressure. BIMCO and other industry bodies are publishing standard clauses that allocate Tier 1 RU surrender costs to the charterer in proportion to the energy consumed under the charter, with corresponding allocations for Tier 2 RUs and SUs. The standard clauses also address the data-flow obligation: the charterer must receive the bunker-delivery notes and the IMO DCS submissions on a voyage-by-voyage basis to compute the year-end allocation correctly.

Capital allocation under RU price uncertainty. The Tier 1 RU price is set on a year-ahead basis by an MEPC sub-committee, with limited formal price-stability mechanisms. The price is expected to track international carbon-price benchmarks, but the sub-committee retains discretion to adjust the price for IMO Net-Zero Fund balance considerations and for political signalling. Capital-allocation decisions on alternative-fuel-capable newbuilds, on retrofit packages and on fuel-supply contracts must therefore be made under price uncertainty over the relevant horizon. Standard scenarios used in industry analysis bracket the 2030 Tier 1 RU price between 150 and 400 USD per tCO2eq, with the central case around 250 to 300 USD reflecting the EU ETS allowance price and the FuelEU Maritime penalty as benchmarks. Under the central scenario, a 65,000 dwt Panamax operating exclusively on VLSFO faces a 2030 Tier 1 RU obligation of approximately 6,500 tCO2eq per year on a typical 7 PJ annual fuel-energy throughput, costing approximately 1.6 to 2.0 million USD per year before any Tier 2 RU obligation on the band below the Required GFI.

The interaction with regional regimes (EU ETS for shipping, FuelEU Maritime) compounds the planning challenge. The EU ETS prices the TtW CO2 emissions of a ship’s EU-related voyages at the EUA price; FuelEU Maritime prices the WtW intensity excess against a separate trajectory; the Required GFI prices the WtW intensity excess of the ship’s annual operation against the IMO trajectory. The three instruments are non-substitutable in the legal sense (a ship subject to all three must comply with all three) but substitutable in the engineering sense (any reduction in fuel WtW intensity reduces the obligation under each instrument). The art of fleet-level operational planning under the combined regime is to identify fuel-mix configurations that minimise the aggregate cost across the three instruments, taking into account regional voyage patterns, bunker-pool composition and the time-evolution of each trajectory.

References

International Maritime Organization, press briefing on the Net-Zero Framework approved at MEPC 83, April 2025.
International Maritime Organization, MEPC 83 final report and outcome summary, 7 to 11 April 2025.
Resolution MEPC.377(80): 2023 IMO Strategy on Reduction of GHG Emissions from Ships, adopted at MEPC 80 in July 2023.
Resolution MEPC.391(82): 2024 Guidelines on lifecycle GHG intensity of marine fuels (LCA Guidelines), adopted at MEPC 82.
MARPOL Annex VI: Prevention of Air Pollution from Ships, consolidated text including Chapter 4 ter as approved at MEPC 83.
Resolution MEPC.304(72): Initial IMO Strategy on Reduction of GHG Emissions from Ships, adopted at MEPC 72 in April 2018.
IMO Data Collection System for fuel oil consumption: Regulations 27 and 28 of MARPOL Annex VI Chapter 4.
IMO short-term measures, EEDI, EEXI, SEEMP and CII regulations, adopted by Resolution MEPC.328(76).
Fourth IMO Greenhouse Gas Study 2020.
Regulation (EU) 2023/1805 (FuelEU Maritime), use of renewable and low-carbon fuels in maritime transport.
IPCC Fifth Assessment Report (AR5), Working Group I, GWP100 metrics, 2013.
IMO hot topic: reducing greenhouse gas emissions from ships.