BIMCO drafts new clause to support biofuel use in time charters

BIMCO has launched a new subcommittee to develop a Biofuel Clause for Time Charter Parties, marking a proactive step toward addressing the legal and operational challenges posed by the growing use of biofuels in shipping. 

With regulatory frameworks like the EU ETS, FuelEU Maritime, and the upcoming IMO Net-zero Framework measures reshaping fuel strategies, biofuels are becoming an increasingly attractive option for reducing emissions. Yet, their integration into charter agreements remains complex, often raising questions around fuel quality, engine compatibility, and liability. 

Addressing Biofuel Challenges in Charter Parties 

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

The 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. By addressing these issues, BIMCO aims to provide a flexible yet robust contractual solution that supports compliance without compromising vessel reliability. 

A draft clause is expected to be presented at BIMCO’s Documentary Committee meeting in October 2025. Once adopted, it will offer much-needed clarity for charterers and owners navigating the transition to low-carbon operations.