BIMCO’s CII clause adopted
Overview
The BIMCO Documentary Committee has adopted a CII Operations Clause for Time Charter Parties which will help the industry commercially navigate the complexities of the new CII regulations from the International Maritime Organization (IMO).
The new regulations on the carbon intensity of international shipping will come into force on 1 January 2023.
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.
“The subcommittee comprised ship owners, charterers and legal and insurance experts. After more than eight months of deliberation and consultation, we have arrived at a clause which serves as an excellent starting point for negotiations for owners and charterers and which is workable in practice. The new clause will be reviewed as the underpinning regulatory regime develops,” says Nicholas Fell, Chairperson of BIMCO’s Documentary Committee.
As the industry likely will be facing more regulations from the IMO and the EU aimed at reducing shipping’s CO2 emissions, the need for new contracts and clauses increases. The CII clause is the latest addition to BIMCO’s suite of carbon clauses for time charter parties. In December 2021, BIMCO published an EEXI Transition Clause and at the end of May 2022, BIMCO released a new Emissions Trading System Allowances (ETSA) Clause for Time Charter Parties in response to the European Union’s intention to include shipping emissions in the EU's emissions trading system, the ETS.
“The CII clause is the latest addition to BIMCO’s suite of carbon clauses for time charter parties. The subcommittee will now continue its work to develop further clauses (such as a CII clause for voyage charter parties) to assist charterers and owners responding to new regulatory requirements, regardless of whether they come from the IMO, EU, or elsewhere,” says Stinne Taiger Ivø, Director, Contracts & Support at BIMCO.
The CII Operations Clause for Time Charter Parties is available here.
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.
“The subcommittee comprised ship owners, charterers and legal and insurance experts. After more than eight months of deliberation and consultation, we have arrived at a clause which serves as an excellent starting point for negotiations for owners and charterers and which is workable in practice. The new clause will be reviewed as the underpinning regulatory regime develops,” says Nicholas Fell, Chairperson of BIMCO’s Documentary Committee.
As the industry likely will be facing more regulations from the IMO and the EU aimed at reducing shipping’s CO2 emissions, the need for new contracts and clauses increases. The CII clause is the latest addition to BIMCO’s suite of carbon clauses for time charter parties. In December 2021, BIMCO published an EEXI Transition Clause and at the end of May 2022, BIMCO released a new Emissions Trading System Allowances (ETSA) Clause for Time Charter Parties in response to the European Union’s intention to include shipping emissions in the EU's emissions trading system, the ETS.
“The CII clause is the latest addition to BIMCO’s suite of carbon clauses for time charter parties. The subcommittee will now continue its work to develop further clauses (such as a CII clause for voyage charter parties) to assist charterers and owners responding to new regulatory requirements, regardless of whether they come from the IMO, EU, or elsewhere,” says Stinne Taiger Ivø, Director, Contracts & Support at BIMCO.
The CII Operations Clause for Time Charter Parties is available here.
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Posted:
21 November 2022
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