BIMCO’s Documentary Committee has approved two clauses and one contract for publication: The much-awaited Emissions Trading System Allowances (ETSA) Clause for Time Charter Parties 2022, the Infectious or Contagious Diseases (IOCD) Clause for Time Charter Parties 2022 and a revised version of GENCON.
The clause is designed to assist the parties entering into a charter party to allocate obligations and responsibilities in terms of obtaining, transferring, and surrendering allowances for greenhouse gas emissions from ships operating under an emissions scheme, such as the EU ETS. The clause addresses not only CO2 emissions but in general all greenhouse gas emissions, such as methane and nitrous oxides.
BIMCO drafted the clause on the basis of the ‘polluter-pays’ principle thus the party operating the ship and providing and paying for the fuel under the time charter (a charterer) is the party responsible for providing and paying for emissions trading allowances.
The shipowner has to monitor the ship’s emissions and provide the relevant emissions data and calculations to the charterer. The charterer considers the information available and transfers the appropriate allowances to the owner every month.
The clause provides for adjustment of allowances due to off-hire events; i.e. a right for charterers to offset against Emission Allowances due or a requirement for owners to return a quantity of Emission Allowances equivalent to what charterers would otherwise have been responsible for, had the ship remained on hire.
If the charterers fail to transfer any of the Emission Allowances the owners have the right to suspend the performance of their obligations under the charter party whilst the ship will remain on hire for as long as such delay takes place.
In addition to the ETSA and IOCD Clauses, the meeting marked the conclusion of a four-year revision process with the Committee’s final stamp of approval for GENCON 2022, the revised version of BIMCO’s most widely-used voyage charter party GENCON 1994.
I am delighted that all the members of the DC were able to meet in person. Discussing face to face and in the same room is an important step in finding contractual solutions to the challenges faced by the shipping industry
said DC Chairperson Nick Fell who is Executive Vice President, Corporate Services and General Counsel at BW Group.
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With respect to the equally much-awaited CII Compliance Clause for Time Charter Parties, the subcommittee in charge of the project was asked to revisit certain aspects of the draft over the coming weeks to make sure that a contractual solution is available soon.
This is particularly important for charter parties which extend into 2023, which is when the new rules come into force. Mindful of the urgent need for the clause, which is aimed at providing a contractual solution regarding the MARPOL carbon intensity regulations, it was decided to hold an online meeting of the Documentary Committee in June with a view to adopting the clause.
The DC also heard progress reports about the various ongoing projects that are currently underway, including the revisions of ASBATANKVOY, WRECKSTAGE and SHIPMAN, the development of a new contract – AUTOSHIPMAN – based on SHIPMAN and aimed at providing the contractual framework for the third-party management of autonomous ships, and a new annex to the BIMCO Bunker Terms 2018 dealing with LNG bunkers.
