In our earlier circulars we have notified Members of regulatory changes to Marpol Annex VI introducing the EEXI (Energy Efficiency Existing Index) and CII (Carbon Intensity Indicator) mechanisms as from 1 January 2023.
In that respect BIMCO had already introduced clauses for inclusion into charterparties, namely ‘CII Operations Clause for Time Charter Parties 2022’ and ‘EEXI Transition Clause for Time Charter Parties 2021’ to apportion the risk and liabilities between Owners and Charterers as a result of the changed regulation.
Separate to the amendments to MARPOL Annex VI as described above, EU Members States have recently also agreed on a “cap and trade” emission scheme called Emissions Trading System (ETS), which is requiring companies to buy permits to emit carbon dioxide. If and when implemented (currently envisaged as from 1st January 2024) this will require shipping companies to purchase allowances for carbon emissions relating to voyages of ships from 400GT to/from EU ports.
BIMCO have now published a clause for incorporation into Time Charter Parties which allocates costs and responsibilities for obtaining, transferring, and surrendering greenhouse gas emissions allowances for ships operating under an emissions scheme, such as the EU Emissions Trading System (ETS).
The basis of the clause is that the party providing and paying for the fuel under the time charter is also the party that is responsible for providing and paying for emissions trading allowances. It falls to the Shipowner to monitor the ship’s emissions and provide the relevant emissions data to the Charterers together with the basis of calculations. Using this information, the Charterers are then to transfer the appropriate allowances to the Owners on monthly basis. The clause also addresses the adjustment of allowances due to offhire events as well as the consequences if Charterers fail to transfer allowances when due.
The “EU ETS – Emission Trading Scheme Allowances Clause for Time Charter Parties 2022” Clause can be accessed via this link.
It should be noted that BIMCO is also working on a EU ETS Voyage Charterparty clauses at present which we will share with our Members via this channel once available.