Bimco has issued guidelines on how shipowners, managers and charterers could share the financial and administrative burden of shipping emissions.
The framework, which consists of four clauses, potentially applies to every shipping trading scheme.
However, it comes with urgency just three weeks before the European Union includes the maritime industry in its Emissions Trading System for voyages to, from and between the bloc’s ports.
The shipping community last year sighed with relief when EU regulations appeared to spell out a “polluter-pays-principle”, which suggested that commercial operators and charterers would ultimately be liable for emission costs estimated to reach billions of dollars.
However, enthusiasm waned after the small print of the regulation put the onus on shipowners and largely left any burden sharing with other stakeholders to be a matter of commercial agreement.
Shipping players told TradeWinds in October that such negotiations were slow in coming.
The clauses released on Friday offer a blueprint of how such deals could work.
One option is to include such costs in the freight payable under the charter party, in which case they become commissionable.
As an alternative, parties can insert a mutually agreed ETS surcharge expressed as a cash amount in their currency of choice.
The Bimco subcommittee drafting the clauses expressed a view that such a surcharge would “generally not be subject to any address or brokerage commission”.
An optional provision allows for price adjustments in case spot allowance prices change over time, “mirroring how a bunker adjustment factor addresses the fluctuations in bunker markets”.
A separate clause sets out ground rules for charterers to transfer emission allowances to owners, who remain responsible for surrendering them to the authorities administering emissions trading schemes.
No right of recourse
Owners and charterers would agree on a set quantity of emission allowances corresponding to the vessel under the charterparty or on a mechanism to compare initial estimates with actual results and settle the difference.
Upon receipt of the emission allowances agreed upon, “owners shall have no right of recourse against the charterers”. The only exception is when a ship emits more than previously estimated or agreed due to actions “resulting solely from the charterers’ breach of the charter party”.
If charterers fail to transfer emission allowances as agreed, “such failure shall be deemed as non-payment of freight under this charter party”.
Bimco charters and clauses are instrumental in providing blueprint contracts for maritime players.
Hiwever, increasingly complex environmental regulations have put the organisation — which represents a wide spectrum of maritime interests — before unique challenges.
Bimco’s Carbon Intensity Indicator (CII) time-charter clause, for example, has met with severe criticism from charterers.