BIMCO, the world’s largest international shipping association, has adopted the new FuelEU Maritime Clause for Time Charter Parties 2024, further strengthening its portfolio of carbon clauses to assist the maritime industry in navigating the EU’s decarbonisation regulations. This landmark clause was approved by BIMCO’s Documentary Committee on November 25 and aims to address the operational and contractual challenges posed by the impending FuelEU Maritime Regulation, which takes effect on January 1, 2025.
Preparing for the FuelEU Maritime Regulation
The regulation represents a significant step in the EU’s efforts to decarbonise the shipping sector by introducing strict requirements on carbon intensity and alternative fuels. To help stakeholders align their contractual frameworks, BIMCO has developed a clause tailored for incorporation into time charter parties, enabling a clear allocation of compliance responsibilities.
“This clause has been eagerly awaited by the industry,” remarked Stinne Taiger Ivø, Deputy Secretary General and Director of Contracts at BIMCO. “January is almost here, and the FuelEU Maritime regulation is complex. We engaged extensively with industry stakeholders during the drafting process to ensure the clause is practical and effective.”
Flexibility for Long-Term Compliance Strategies
The clause provides charterers with flexibility to decide their compliance strategies under longer-term agreements. Options include pooling, banking, or borrowing emissions allowances, ensuring a versatile approach to meeting regulatory requirements. According to Nicholas Fell, Chair of BIMCO’s Documentary Committee, the regulation is expected to have a profound impact on shipping operations, even more so than the EU Emissions Trading System (ETS).
“The clause we have adopted today is the result of a collaborative process involving owners, charterers, P&I clubs, legal experts, and other stakeholders,” Fell noted.
Shipowners and Third-Party Compliance
Under the new clause, the shipowner is responsible for compliance with the FuelEU Maritime Regulation. However, in practice, these duties may fall to a third-party ship manager, particularly when a ship management agreement under the International Safety Management (ISM) Code is in place. To address this, BIMCO is working on a complementary clause for its SHIPMAN agreement, ensuring comprehensive regulatory alignment across operational frameworks.
Expanding the Carbon Clauses Portfolio
This addition builds on BIMCO’s growing portfolio of decarbonisation clauses, including:
- Emission Trading Scheme Allowances Clause for Time Charter Parties
- CII Clause for Voyage Charter Parties
- CII Operations Clause for Time Charter Parties
- EEXI Transition Clause for Time Charter Parties
In December 2023, the Documentary Committee introduced ETS clauses for voyage charter parties and ship management agreements. More recently, in June 2024, ETS clauses were adopted for contracts of affreightment, further reflecting BIMCO’s commitment to supporting the industry in its decarbonisation journey.
About BIMCO
BIMCO represents over 2,000 members across 130 countries, accounting for 62% of the world’s tonnage. The non-profit organisation provides standard contracts and clauses, regulatory advocacy, expert advice, and training to its global membership, ensuring the maritime industry remains competitive, sustainable, and aligned with emerging regulations.
By adopting the FuelEU Maritime Clause, BIMCO reaffirms its leadership in helping the shipping industry navigate complex regulatory landscapes while promoting sustainable practices.
Source BIMCO