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BIMCO publishes ahead of IMO efficiency regulation EEXI Transition Clause

BIMCO publishes ahead of IMO efficiency regulation EEXI Transition Clause

New regulation from the International Maritime Organization (IMO), which will require existing ships to reduce carbon emissions, is due to enter into force in just under one year. As compliance will benefit to a large extent from co-operation between shipowners and charterers, BIMCO has developed a new clause to address the changes.

The new regulation will require existing ships to improve their efficiency roughly to be in line with the EEDI requirement for new ships today. For a large part of the global fleet, getting the EEXI certification for a ship may mean applying technical modifications, primarily through engine power limitation (EPL) or shaft power limitation (SHAPOLI).

The new EEXI Transition Clause can be used in both existing and future time charter parties. It addresses the relationship between shipowners and charterers in the context of compliance with the new regulation where technical modifications and logical amendments to charter party descriptions and warranties are required.

As the shipping industry is facing more regulation aimed at reducing shipping’s CO2 emissions going forward, the need for new contracts and clauses is increasing.

“The upcoming regulatory changes will impact the way ships can be operated in the future and require a new approach to the contractual relationship between owners and charterers,” says Peter Eckhardt of German shipowner F. Laeisz, who heads the drafting team.

“In addition to EEXI, we are also developing clauses for emissions trading systems (ETS) and the carbon intensity indicator (CII) regime to meet the future challenges for the industry,” says Søren Larsen, Deputy Secretary General at BIMCO.

The EEXI Transition Clause for Time Charter Parties has been developed by a team of experts and can be found together with accompanying explanatory notes here.

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