What are the fundamentals of the clause?

• BIMCO believes the responsibility should be shared between the owner and the charterer.
• Owners and charterers need to collaborate and cooperate to manage the IMO objective to reduce carbon emissions. The clause sets out a way forward in a time charter context, where charterers are responsible for the operation of the vessel. 
• Although the owners and charterers have different roles, the task to reduce carbon emissions must be shared and requires both parties to be committed to collaborate to manage this task.
• When entering into a charter party, or incorporating the clause into an existing charter party, the parties are to agree on a specific CII value to be achieved each year.
• Responsibilities in shipping are sometimes shared and sometimes distributed amongst various entities in shipping, such as cargo owners, time charterers, ship owners, technical managers, and others.
• In the case of CII, compliance with the regulations rests with the ISM company of the ship and the ship itself.
• But to comply, the ISM company needs the assistance of the commercial operator of the ship because the loading of the ship and the voyage orders for the ship have considerable impact on the ability to comply with the regulations.
• Because it is a regulatory requirement that the ship’s operation be targeted at giving a CII rating of at least C, this obligation must be inherited via contractual agreements.
• CII therefore becomes a shared responsibility between the owner and the charterer which requires co-operation and sharing of data.
• The ISM company has prepared an implementation plan which documents how the ship will achieve this goal. That plan should be applied as written, and progress towards achieving the goal of the plan should be monitored and followed up during the year.
• Such follow-up is only possible when the parties co-operate.
• The MARPOL CII Regulations, at a high-level, place a hard obligation on ships to document in an implementation plan how the required annual operational CII will be achieved during the next three years.
• This implementation plan includes operational and technical measures and forms part of a ship’s Ship Energy Efficiency Management Plan (SEEMP) which is approved by the flag State.
• The implementation plan is therefore the hard requirement on the ship (the company), before any charter party is entered into, thus balancing the hard requirement on the charterer vis-a-vis the required CII in the BIMCO clause.

BIMCO published the CII Operations Clause in November. Are there any plans to revise and/or change the CII clause?

• BIMCO’s contracts and clauses are constantly kept under review and updated to respond to market developments and changing needs of the industry.
• To do this, we seek feedback from a wide representation of industry players. Such insight is invaluable for clauses already published as well as the development of future clauses.
• As with our other clauses, to ensure that the CII clause continues to stay fit for purpose, a clause review will be conducted once there is a clear understanding of how the MARPOL Carbon Intensity Regulations are working in practice.

How will BIMCO use the feedback?

• All feedback will be directed into a clause review which will be conducted once there is a clear understanding of how the MARPOL Carbon Intensity Regulations are working in practice.
• The regulation has only just come into force and the CII regulation is complex. The industry will need some time to adjust and gain experience.
• We will continue to seek solutions to help our members operate commercially in a complex regulatory environment.
• We will continue to monitor developments as the CII regulation enters into force.

Other points related to the CII clause and the CII regulation overall:

• BIMCO has developed the CII clause in response to the complex CII regulation with the expectation that all actors will engage in the practical aspects of decarbonising shipping.
• Following recent dialogue with members, BIMCO understands that many stakeholders are still struggling to interpret the complexities of the CII regulation. BIMCO is therefore offering comprehensive training along with free webinars to explain how the clause works in practice and how to understand the CII regulation.
• The CII regulations represent a fundamental shift for our industry where business as usual is no longer an option.
• There is little doubt that there is no easy way to balance the obligations of a ship under the MARPOL CII Regulations with the time charterers’ right to direct the employment of the vessel.
• The Documentary Committee comprised of both owners and charterers, and input from industry players, large and small, was gathered as part of the drafting process for the CII clause.
• BIMCO will continue to act in a democratic and straightforward manner where all companies, large, medium and small, have a voice and are heard.
• Decarbonisation of shipping requires the proactive involvement of every single actor in the maritime sector.
• It is also BIMCO’s hope that all parties will work with IMO regulations not against them with the aim to practically engage in decarbonising shipping, and hence make the world a greener place.

Watch recordings of BIMCO's free CII webinars

Go to the BIMCO Video Library

The link above opens the video library filtered on the CII topic. You can change the filter setting at the top of the screen to see the full range of BIMCO videos, including recordings of webinars, events and films.