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Energy & Power Shipping and Logistics

BIMCO publishes two bunker clauses to prepare for IMO 2020 rule

BIMCO, the world’s largest international shipping association, said Monday it has published two bunker clauses to ensure a smooth transition to the International Maritime Organization’s global sulfur limit rule for marine fuels.

The IMO will cap global sulfur content in marine fuels at 0.5% from January 1, 2020, from 3.5% currently. This applies outside the designated emission control areas, where the limit is already 0.1%.

Although less than 13 months remain for the rule to be implemented, a fair amount of uncertainty still prevails in the shipping industry.

The “BIMCO 2020 Marine Sulphur Content Clause for Time Charter Parties” and the “BIMCO 2020 Fuel Transition Clause for Time Charter Parties” have been developed by a team comprising owners, charterers, bunker suppliers, P&I clubs and legal experts, BIMCO said.

The “BIMCO 2020 Marine Sulphur Content Clause for Time Charter Parties” is written as a straightforward compliance provision with the sulfur content requirements of MARPOL Annex VI, Grant Hunter, BIMCO head of contracts and clauses, said.

MARPOL VI, developed by the IMO, deals with maritime safety and security, as well as the prevention of marine pollution from ships.

Issues relating to the specifications, grades and quality/suitability of the fuel supplied by time charterers are covered by existing standard bunker clauses in time charters, so these should not need to be amended in relation to sulfur content alone, BIMCO said.

“BIMCO 2020 Fuel Transition Clause for Time Charter Parties” deals with the one-off event of switching from 3.50% sulfur content fuel to 0.50% sulfur content.

The switch is a process that will need to be started before January 1, 2020 and so requires the owners and charterers to cooperate to ensure a smooth transition.

The clause is designed to provide a fair allocation of responsibilities and liabilities between the owners and charterers in managing remaining stocks of fuel that will become non-compliant under MARPOL from 1 January 2020, BIMCO said.

“We would also recommend incorporating the clause into time charter parties with redelivery very close to January 1, 2020, where delays or extensions might result in the ship redelivering after the date the change comes into force,” Hunter said.

GHG EMISSIONS

Meanwhile, BIMCO in an update on December 7, outlined its position with respect to greenhouse gas emissions.

BIMCO said it supported the agreed three-step approach to enhancing energy efficiency of international shipping and welcomed the IMO adoption of the mandatory data collection scheme as the first step.

BIMCO also welcomes the concept of speed optimization, as a means to increase the overall efficiency for ships, it said.

However, it said that operational efficiency indices, such as the IMO Energy Efficiency Operational Indicator, are overly simplistic and even misleading on an individual ship basis and should, therefore, not be considered for regulatory purposes.

Also, such indices could be wrongly perceived as valid selection criteria when assessing the efficiency of a ship prior to chartering, it added.

Regulations should provide incentives for owners to invest in low-carbon technology, it said.

“If technical and operational measures cannot wholly meet agreed reduction targets, then any funds generated by means of a globally applied Market Based Measure (MBM) for shipping must be controlled by the IMO and mostly be disbursed to support further technological development focused on energy efficiency in shipping aimed at new and existing ships,” it said.

BIMCO also wants the EU to align its Monitoring, Reporting Verification regulation to IMO’s data collection system, it added.

The EU MRV rule entered into force on July 1 2015, and it requires ship owners and operators to annually monitor, report and verify CO2 emissions for vessels larger than 5,000 gross tonnage, calling at any EU and European Free Trade Association (Norway and Iceland) port. Data collection takes place on a per voyage basis and started in January 1, 2018.

Source: https://www.spglobal.com/platts/en/market-insights/latest-news/shipping/121118-bimco-publishes-two-bunker-clauses-to-prepare-for-imo-2020-rule

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