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BIMCO’s new CII clause puts pressure on time charterers

International shipping organisation BIMCO has released its keenly awaited Carbon Intensity Indicator (CII) operations clause, with charterers expected to take responsibility of a ship’s emissions.

The CII, due to come into effect on January 1, is one of the International Maritime Organization’s most significant pieces of green legislation for years. How it plays out on time charters has been something shipping has been deliberating for many months.

The BIMCO Documentary Committee yesterday adopted the CII Operations Clause for Time Charter Parties which assumes that a time charterer should take responsibility for a ship’s emissions because the charterer makes the relevant decisions on the operation of the ship.

When entering into the charter party, or incorporating the clause into an existing charter party, the parties are to agree on a specific CII to be achieved each year, BIMCO explained in a release. 

“The new clause will be reviewed as the underpinning regulatory regime develops,” said Nicholas Fell, chair of BIMCO’s Documentary Committee, discussing the eight months’ discussions that led to yesterday’s clause announcement.

As the industry faces more regulations from the IMO and the EU aimed at reducing shipping’s CO2 emissions, the need for new contracts and clauses increases. 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,” said Stinne Taiger Ivø, director, contracts and support at BIMCO.  

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

Comments

  1. The shipping sector seems to have been the target for draconian emissions interventions. In reality road transport (cars, vans, buses and trucks) are much larger emitters but governments are either unable or unwilling to take action to constrain this major source of pollution. car owners have votes. Shipping is invisible and does not have much political clout.

    1. agreed similar to when the IMO called for reduced sulphur content in IFO and placed the responsibility on ship owners.operators but neglected to require the same from the refiners/suppliers of bunkers
      jm
      eurocandian
      vanouiver canada

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