Seatrade-Maritime: Bimco introduces biofuel clause for timecharters

Published by Seatrade-Maritime

As global shipping continues to decarbonise, Bimco’s new biofuel clause is designed to support the transition to low-carbon fuels. However, until now, contracts between owners and charterers have not reflected some of the risks relating to new fuels, including quality, engine compatibility, and liabilities.

Stinne Taiger Ivø, Bimco’s Deputy Secretary General and Director of Contracts, commented: “The Biofuel Clause for Time Charterparties will support the industry’s transition to low-carbon fuels. The clause is the product of thorough consideration of safety and technical requirements following extensive consultation with shipowners, charterers, fuel experts, and P&I clubs.” 

Nicholas Fell, Chairman of the organisation’s Documentary Committee, added: “The new clause provides a clear framework for the safe use of biofuel. It includes definitions, specification standards and the respective obligations of owners and charterers when biofuels are supplied and consumed.” 

So far, biofuels such as fatty acid methyl ester (FAME) and hydrotreated vegetable oil (HVO) are used primarily as drop-in fuels. Technically, ships could operate entirely on biofuel but it is not available at scale in  many bunker ports apart from hubs such as Singapore and Rotterdam.

However, as it becomes more widely available, it will enable owners to reduce their exposure to fuel-related  penalties in some regions. At present, however, most biofuel is used in land transport.