Time charterers put on pressure with BIMCO’s new CII clause

International shipping organisation BIMCO has released its keenly awaited Carbon Intensity Indicator (CII) operations clause, with charterers expected to take responsibility of a ship’s emissions.

The CII, due to come into effect on January 1, is one of the International Maritime Organization’s most significant pieces of green legislation for years. How it plays out on time charters has been something shipping has been deliberating for many months.

The BIMCO Documentary Committee yesterday adopted the CII Operations Clause for Time Charter Parties which assumes that a time charterer should take responsibility for a ship’s emissions because the charterer makes the relevant decisions on the operation of the ship.

When entering into the charter party, or incorporating the clause into an existing charter party, the parties are to agree on a specific CII to be achieved each year, BIMCO explained in a release.

As the industry faces more regulations from the IMO and the EU aimed at reducing shipping’s CO2 emissions, the need for new contracts and clauses increases. In December 2021, BIMCO published an EEXI Transition Clause and at the end of May 2022, BIMCO released a new Emissions Trading System Allowances (ETSA) Clause for Time Charter Parties in response to the European Union’s intention to include shipping emissions in the EU’s emissions trading system, the ETS.