The Baltic and International Maritime Council (BIMCO) has adopted a biofuel clause for time charter parties to address the legal and operational challenges arising from the increasing use of low-carbon fuels in the shipping industry.

In a statement on June 11, BIMCO said, "As the shipping industry advances decarbonization, regulatory frameworks are reshaping corporate fuel strategies. However, the process of incorporating biofuels into charter parties is highly complex and frequently raises issues regarding fuel quality, engine compatibility, and liability allocation."

The new clause provides clear definitions and specifies agreed-upon fuel specifications aligned with ISO standards. It establishes standardized procedures covering the sampling, testing, storage, and handling of biofuels. Additionally, the clause introduces a mechanism for performance adjustments when using fuels with different calorific values, offering a fair basis for adjusting existing speed and consumption warranty provisions in time charter parties. Furthermore, it includes safeguards concerning fuel stability, batch segregation, and storage lifespan, reflecting best operational practices for the safe use of biofuels on board.

According to Stinne Taiger Ivø, BIMCO's Deputy Secretary General and Head of Contracts, the clause was developed following extensive consultations with shipowners, charterers, fuel experts, and P&I clubs, balancing both safety and technical considerations.

Nicholas Fell, Chairman of the BIMCO Documentary Committee, stated, "The new clause provides a clear framework for the safe use of biofuels, encompassing relevant definitions, specification standards, and the respective obligations of shipowners and charterers when using biofuels."

Addressing various aspects of the transition to alternative fuels, BIMCO has previously released an LNG appendix to its BIMCO Fuel Clause 2018, as well as an LNG bunker supply clause for incorporation into charter parties. Meanwhile, an appendix regarding methanol bunkering and a new Methanol Appendix to the BIMCO Fuel Clause 2018 have also been adopted.

BIMCO has indicated that it expects to commence work on an ammonia appendix later this year.