(www.MaritimeCyprus.com) BIMCO, the world's largest international shipping association, recently introduced a new clause in its standard time charter party agreements that places responsibility for paying for emissions allowances or credits on charterers. The clause is known as the "ETS - Emission Trading Scheme allowances clause for time charter parties 2022".
BIMCO offers the clause to provide clarity in anticipation of the European Union’s mandatory ship emissions trading scheme becoming effective shortly. Emissions Trading System (ETS) is a “cap and trade” scheme that permit carriers to emit greenhouse gases in exchange for allowances.
The draft clause assigning financial responsibility for vessel emissions adheres to the “polluter-pays” principle by ensuring the pass-through of ETS costs to the commercial operators of vessels – in this case, time charterers, BIMCO says.
The introduction of this clause is in response to the increasing pressure on the shipping industry to reduce its greenhouse gas emissions and comply with regulatory requirements. By placing the responsibility for emissions allowances or credits on charterers, it incentivizes them to select vessels with lower emissions profiles and to operate them in the most environmentally friendly way possible.
It's worth noting that the clause is voluntary and parties are free to negotiate different terms if they so choose. However, it represents an important step towards ensuring that the shipping industry plays its part in reducing global greenhouse gas emissions.
You can download below the BIMCO clause: "ETS - Emission Trading Scheme allowances clause for time charter parties 2022":
Source: BIMCO
For more info on EU Emissions Trading System, click HERE
