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BIMCO adds charter party clause for FuelEU time charter agreements
With a 1 January 2025 entry, the FuelEU Maritime Regulation may require stakeholders to start taking measures now, says BIMCO
The world’s largest shipping trade lobby, BIMCO, has added a carbon clause specifically for the January 2025 entry into force of the European Union’s (EU) FuelEU regulations.
BIMCO said its FuelEU Maritime Clause for Time Charter Parties 2024 is designed for incorporation into time charter parties.
“This clause has been eagerly awaited by the industry. January is almost here, and the FuelEU Maritime regulation is complex. Because of this, we have carried out several industry consultations during the drafting process to make sure we arrived at a clause that works in practice,” deputy secretary general and director of contracts at BIMCO, Stinne Taiger Ivø said.
According to BIMCO, work on the clause prioritised a workable standard for "most scenarios and commercial relationships".
For longer-term charter parties, the wording of the clause allows charterers to have flexibility to decide on a compliance strategy. Options include fleet pooling, banking or borrowing the carbon credit requirements associated with the EU regulation.
“The FuelEU Maritime regulation will significantly impact the shipping industry, even more so than the EU Emissions Trading System (ETS). The clause we have adopted today is the result of a collaborative process between owners, charterers, P&I and legal experts and other stakeholders,” chair of BIMCO’s Documentary Committee, Nicholas Fell said.
In December 2023, the Documentary Committee adopted a new EU ETS Allowances Clause for BIMCO’s shipmanagement agreement, SHIPMAN, and three ETS clauses for Voyage Charter Parties. In June 2024, the Documentary Committee adopted three ETS clauses for Contracts of Affreightment.
Other published decarbonisation clauses in BIMCO’s carbon clauses portfolio include the Emission Trading Scheme Allowances Clause for Time Charter Parties, CII Clause for Voyage Charter Parties, CII Operations Clause for Time Charter Parties and the EEXI Transition Clause for Time Charter Parties.
Under the latest BIMCO clause, the company responsible for compliance with FuelEU Maritime is the shipowner, but BIMCO said it is developing a clause for SHIPMAN to cover cases where third-party shipmanagers have agreed to take over all the duties and responsibilities imposed by the International Management Code for the Safe Operation of Ships and for Pollution Prevention.
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