BIMCO’s new clause to support biofuel use in time charters

June 5, 2025, by Ajsa Habibic

Shipping association BIMCO has formed a new subcommittee to develop a Biofuel Clause for Time Charter Parties in a bid to address the legal and operational challenges stemming from the growing use of biofuels in shipping.

As regulatory frameworks like the EU ETS, FuelEU Maritime, and the upcoming IMO Net-zero Framework measures shape the future of the maritime industry, ship owners and operators are exploring options to reduce emissions by using biofuels.

Since the integration of biofuels into charter agreements is complex, often raising questions around fuel quality, engine compatibility, and liability, BIMCO plans to draft a new clause to address this challenge.

As disclosed, the newly formed subcommittee, comprising shipowners, charterers, P&I representatives, and technical experts, met for the first time on April 7, 2025.

The task of this subcommittee is to focus on defining the scope and standards for biofuels, clarifying how they may be supplied and handled, and ensuring that their use aligns with performance expectations and regulatory obligations, BIMCO explained.

The new clause will also consider the practical realities of biofuel use, such as blending with conventional fuels, onboard storage, and the implications for speed and consumption warranties, with an aim to provide a flexible and robust contractual solution that supports compliance without compromising vessel reliability.

BIMCO expects a draft clause to be presented at its Documentary Committee meeting in October 2025, noting that, once adopted, “it will offer much-needed clarity for charterers and owners navigating the transition to low-carbon operations”.