June 2025 – BIMCO (Baltic and International Maritime Council) has taken a significant step towards supporting the maritime industry’s transition to low-carbon operations by launching a new subcommittee to develop a Biofuel Clause for Time Charter Parties. This move highlights BIMCO’s proactive approach to addressing the legal and operational challenges posed by the increasing use of biofuels in shipping.
As the global shipping industry faces growing pressure from regulatory frameworks like the EU Emissions Trading System (ETS), FuelEU Maritime, and the forthcoming IMO Net-Zero Framework, biofuels are becoming a vital option for reducing carbon emissions. However, their integration into charter agreements remains complex due to a variety of factors including fuel quality, engine compatibility, and issues around liability.
The new subcommittee aims to address these concerns and provide a practical, standardized solution to the emerging challenges, facilitating the incorporation of biofuels in time charter parties.
Addressing Biofuel Challenges in Charter Parties
The newly formed subcommittee, composed of representatives from shipowners, charterers, Protection & Indemnity (P&I) clubs, and technical experts, held its first meeting on April 7, 2025. The group’s mission is to develop a comprehensive Biofuel Clause that will help resolve key uncertainties regarding biofuels’ use in shipping. These include:
- Fuel Quality and Compatibility: Ensuring biofuels meet performance standards and are compatible with various types of engines.
- Blending and Handling: Addressing the challenges related to biofuels being blended with conventional fuels, and how these mixtures are managed during the voyage.
- Onboard Storage: Establishing safe and efficient methods for storing biofuels on vessels, considering their unique characteristics.
- Regulatory Alignment: Ensuring that biofuel use complies with regulatory frameworks like FuelEU Maritime and IMO Net-zero Framework.
The new Biofuel Clause will also tackle practical operational issues, such as maintaining the vessel’s performance during biofuel use, particularly in relation to speed and fuel consumption warranties. The goal is to create a flexible yet robust contractual framework that supports biofuel adoption while ensuring charterers and owners do not experience disruptions to vessel reliability.
BIMCO’s initiative is timely, as the shipping industry continues to explore sustainable fuel alternatives. Biofuels are seen as a key part of the solution, providing a drop-in alternative to conventional marine fuels, thus reducing emissions without requiring significant modifications to existing infrastructure.
Draft Clause to be Presented at BIMCO’s Documentary Committee Meeting in October 2025
The subcommittee is working diligently on finalizing the details of the Biofuel Clause, and a draft is expected to be presented at BIMCO’s Documentary Committee meeting in October 2025. The adoption of this clause will provide much-needed clarity for charterers and owners, offering a standardized approach that aligns with the growing push toward decarbonization and regulatory compliance.
Once adopted, the clause will be a vital tool for the industry, helping both charterers and shipowners navigate the transition to biofuels and low-carbon operations with greater confidence and legal clarity. This initiative further emphasizes BIMCO’s leadership role in supporting the maritime industry’s shift toward sustainability.
BIMCO’s Commitment to Supporting Maritime Decarbonization
As part of its ongoing commitment to maritime decarbonization, BIMCO will also create a sounding board to facilitate industry-wide input on the Biofuel Clause. This forum will include stakeholders from across the maritime sector, providing an opportunity for them to review and comment on the draft clause as it evolves. By incorporating feedback from a wide range of industry players, BIMCO ensures that the clause will address the practical needs of the sector and help ease the transition to sustainable shipping practices.
Stakeholders interested in participating in the sounding board are encouraged to contact BIMCO or visit the “What We Do” section of BIMCO’s official website for more information.
About BIMCO
BIMCO (Baltic and International Maritime Council) is the world’s largest international shipping association, representing the interests of shipowners, operators, and charterers. Established in 1905, BIMCO is renowned for its global leadership in maritime policy, legal, and operational matters.
With over 2,000 members from more than 120 countries, BIMCO plays a pivotal role in shaping the future of global shipping. The organization provides a wide array of services, including the development of standardized contract forms, operational guidelines, and policy advocacy to ensure the continued growth and sustainability of the shipping industry.
BIMCO is at the forefront of the maritime industry’s efforts to meet the decarbonization challenge, collaborating with international organizations, regulatory bodies, and stakeholders to develop practical solutions that align with global emissions reduction goals. Through initiatives like the Biofuel Clause and other sustainability efforts, BIMCO is helping its members navigate the evolving regulatory landscape and transition to greener, more sustainable maritime operations.
Source BIMCO