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FuelEU Maritime: Contractual alignment now or risk costly disputes, warns West P&I

Julien Rabeux, Head of Claims in Singapore, urges stakeholders to adopt BIMCO’s 2024 FuelEU clauses and define responsibilities in contracts to mitigate exposure.

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Julien Rabeux, Head of Claims (Singapore) at West of England P&I Club 1000 (L) x 600 (H)

Julien Rabeux, Head of Claims (Singapore) at maritime insurance provider West of England P&I Club (West P&I), warns that without clear clauses in ship management agreements and time charterparties, parties risk costly disputes, particularly as the first compliance assessments under FuelEU Maritime approach:

The maritime fuel landscape is shifting rapidly, and with the introduction of FuelEU Maritime on 1 January 2025, shipowners, managers, and charterers operating in Europe now face one of the most complex compliance frameworks to date. 

The regulation is designed to reduce the greenhouse gas (GHG) intensity of shipboard energy consumption, incentivise the use of onshore power supply in EU ports, and accelerate the uptake of alternative fuels. However, while its environmental ambitions are clear, its contractual implications are not – and that’s precisely where the risk lies.

Compliance liability lies with the ‘Shipping Company’ – but who pays?

Under FuelEU Maritime, the ‘Shipping Company’ – typically the Document of Compliance (DOC) holder – bears legal responsibility for compliance. That may be the registered owner, a third-party technical manager, or a bareboat charterer. Ships that fail to meet the required GHG intensity targets face remedial penalties. If non-compliance persists for two consecutive years, the ship could be issued an expulsion order.

To manage emissions, companies may bank or borrow compliance surplus or deficit across reporting years, and pool vessels to balance compliance within a fleet. These options may offer operational flexibility – but without contractual clarity, they also raise critical questions: Who pays the penalties? Who controls pooling decisions? Who retains the value of overcompliance?

West is urging all stakeholders to address these questions now – not after a penalty has already been incurred.

Contract clarity under SHIPMAN agreements

Where a technical manager is the DOC holder, the management agreement must clearly reflect FuelEU responsibilities. The BIMCO FuelEU Maritime Clause for SHIPMAN 2024 is a practical tool that helps allocate compliance obligations, including monitoring, reporting, and submission of plans to the relevant authorities.

In addition to administrative compliance, the contract should specify who controls the vessel’s compliance strategy – including decisions around banking, borrowing and pooling – and who benefits from any associated cost savings or revenue. It should also set terms for indemnity, including the timeframe for transferring funds to reimburse penalties, the provision of security, and what happens if reimbursement is delayed or withheld. Without such provisions, parties risk serious operational and legal disruption.

Time charterparties: don’t assume indemnity where none is written

The stakes are equally high in time charter arrangements. In the absence of a clause dealing explicitly with FuelEU compliance, owners may not be able to refuse to enter EU waters or seek an indemnity for penalties caused by charterer-supplied fuel – even if that fuel results in non-compliance. As such, relying on implied terms or assumptions is an unnecessary gamble.

The BIMCO FuelEU Maritime Clause for Time Charter Parties 2024 provides a robust contractual framework to address key issues and allocate responsibilities for compliance between owners and charterers. It requires owners to inform charterers of the vessel’s compliance balance on delivery and during the charter, mandates a monitoring plan and GHG reporting, and allows charterers to supply compliant fuel or pay a surcharge when necessary. It also provides mechanisms for compliance flexibility such as banking, pooling, borrowing, and surcharge payments, with rights to reimbursement and for owners to suspend performance if the surcharge is unpaid.

However, the BIMCO clause does not cover several critical areas, which must be considered and negotiated in addition to incorporating the standard clause:

Fuel specifications: The clause allows charterers to supply fuel but does not mandate standards or certifications (e.g. Renewable Energy Directive compliance, ISO specifications, GHG intensity). Separate provisions should specify which fuels are acceptable, certification requirements, and documentation to support compliance.

Performance warranties: The clause not address the impact of alternative fuels on vessel performance. Charterparties should include provisions for suspending or adjusting performance warranties when the calorific value of alternative fuels affects vessel operations.

Expulsion risk: While the clause covers surcharges and compliance mechanics, it does not address what happens if a vessel is expelled from EU waters due to non-compliance under FuelEU Maritime. Charterparties must clarify whether charterers can terminate or be liable in such scenarios.

Avoid assumptions, adopt structure

As we move toward the first full compliance assessments under FuelEU Maritime, disputes are likely to arise unless roles, risks, and rewards are properly apportioned. The 2024 BIMCO clauses – both for SHIPMAN and time charterparties – offer a practical, industry-consensus framework to help stakeholders avoid ambiguity and litigation.

This is not a theoretical risk. FuelEU Maritime brings with it financial penalties, operational restrictions, and reputational consequences. Contractual silence will not offer protection.

For owners, managers, and charterers alike, adopting standardised clauses and revisiting contract structures will not only provide legal certainty but also support operational planning and commercial agility. West is on hand to support its Members navigate these changes, review clauses, and manage contractual exposure.

 

Photo credit: West P&I
Published: 8 September, 2025

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Marine Fuels Alliance partners with TidalIQ on website emissions calculator

Emissions calculator helps users estimate vessel or fleet compliance positions, potential penalty exposure, pooling requirements and the indicative value of surplus compliance

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Marine Fuels Alliance partners with TidalIQ on website emissions calculator

Marine Fuels Alliance (MFA) on Friday (3 July) said it has connected with TidalIQ, which has provided an emissions calculator for its website.

MFA said the FuelEU Maritime has turned vessel emissions performance into a commercial issue. Operators now need to understand whether their fleet is in surplus or deficit, what that means financially, and whether pooling can reduce cost or create value.

“The emissions calculator helps users estimate vessel or fleet compliance positions, potential penalty exposure, pooling requirements and the indicative value of surplus compliance,” the alliance said in a social media post.

From there, the TidalIQ platform helps users move from calculation to action: managing fleet compliance, identifying pooling opportunities, generating standardised documentation and maintaining a clear audit trail for verifiers and internal records.

“For operators facing deficits, TidalIQ helps identify a more cost-effective route to compliance. For operators with surplus, it creates a clearer path to monetising better-performing vessels,” it added.

“FuelEU compliance is no longer just a regulatory task. It is a commercial decision – and TidalIQ helps the market make that decision confidently.” 

Note: The emissions calculator can be found here

 

Photo credit: Marine Fuels Alliance
Published: 6 July, 2026

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Port & Regulatory

EmissionLink calls for clarity as EU moves to prevent double carbon charges

The emissions management firm welcomed EC’s commitment to avoid duplicate emissions charges but says shipping urgently needs practical guidance on how EU and IMO carbon regimes will work together.

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Philippos Ioulianou, EmissionLink

The following is a commentary by Philippos Ioulianou, Managing Director of EmissionLink, on how the maritime sector needs clear guidance on how how EU and IMO regulations will be reconciled to avoid duplicate carbon costs for shipowners:

The European Commission’s commitment to prevent shipping companies from being charged twice for the same emissions is a welcome step, but the maritime sector now needs clear guidance on how this will work in practice, according to integrated emissions management service EmissionLink.

The principle of avoiding double charging is clear, but the practical reality is far more complex. Shipping is already navigating a crowded regulatory landscape. EU ETS and FuelEU Maritime are now in force, while the IMO is moving towards its own global Net-Zero Framework. Each system has a different scope, timeline, calculation method and commercial logic. Without detailed guidance, avoiding duplicate carbon costs will not be straightforward.

A vessel trading into Europe may be exposed to EU ETS, FuelEU Maritime and future IMO carbon rules. However, the obligations will not always sit with the same party, emissions data may not always be calculated in the same way, and costs may not be recoverable under existing charterparty terms. 

According to EmissionLink, the risk for shipowners is not only paying twice for the same emissions. It also includes reporting twice, calculating twice and building parallel compliance processes that increase cost, complexity and confusion.

“The industry needs to know how EU and IMO obligations will be reconciled, how equivalent payments will be recognised, and what evidence shipowners will need to prove that the same tonne of emissions has not been penalised more than once,” said Philippos Ioulianou, Managing Director of EmissionLink. “This will determine whether carbon regulation is seen as a fair transition tool or simply another cost burden.”

Accurate and auditable emissions data will be more important than ever, but data alone is not enough. Owners and operators also need the expertise to interpret that data across different regulatory schemes and make informed commercial decisions. EmissionLink has already supported the delivery of accurate FuelEU emissions data for more than 600 vessels, giving it first-hand insight into the complexity of compliance across different vessel types and operating profiles.

“Every vessel has a different operating profile, every voyage has a regulatory consequence, and every compliance decision can affect cost exposure, penalties, pooling options, charterparty recovery and future planning,” said Mr Ioulianou. “The challenge is no longer simply submitting the right figure into the right system. It is understanding how current and future emissions schemes interact, how they affect the business, and how to avoid double penalties, duplicated processes and unnecessary costs.”

The company also highlights that carbon pricing will only retain credibility if revenues are clearly directed back into maritime decarbonisation. Speaking at a ShipEnergy forum during Posidonia, Mr Ioulianou argued that EU member states must set out a clear pathway for the use of revenues generated through EU ETS and FuelEU-related mechanisms.

“These funds should be directed back into the maritime sector,” he said. “They should not become a general revenue stream for governments. Demanding that shipping pays more while failing to invest in the infrastructure needed to make decarbonisation possible is not a transition strategy. It is taxation with a green label.”

Whilst the European Commission is right to recognise the risk of duplicate carbon costs, the industry now needs practical, transparent and enforceable rules that support compliance while helping shipping transition to lower-carbon operations.

“Shipping cannot decarbonise on promises alone,” said Mr Ioulianou. “The sector needs clarity, consistency and confidence that regulation will support the transition rather than simply adding cost and complexity.”

 

Photo credit: EmissionLink
Published: 30 June, 2026

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FuelEU

Hafnia Pools surpasses 170 vessels, achieves FuelEU Maritime compliance

In announcing the company’s Q1 2026 financial results, it said five vessels joined Hafnia Pools during the first quarter of the year, bringing the total number of Pool Partners to 24 across segments.

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Hafnia Pools surpasses 170 vessels, achieves FuelEU Maritime compliance

Singapore-headquartered tanker operator Hafnia on Wednesday (24 June) the company closed Q1 2026 with more than 170 vessels trading across its pool platform.

In announcing the company’s Q1 2026 financial results, it said five vessels joined Hafnia Pools during the first quarter of the year, bringing the total number of Pool Partners to 24 across segments.

Since November 2025, vessels entering the Pools have had an average age of six years or younger, further strengthening the competitiveness and earnings capability of the platform. 

This continued inflow of modern tonnage supports Hafnia’s focus on maintaining an efficient and attractive fleet profile, while enhancing the long-term value proposition for Pool Partners.

In Hafnia’s MR Pool, six owners now each have three or more vessels committed.

During Q1 2026, Hafnia Pools successfully met the EU’s FuelEU Maritime requirements for 2025. Across the Pool, 108 vessels collectively exceeded the emissions limits; however, by working together under a “pooling” system, this was balanced out. By using cleaner vessels, biofuel, and purchased emissions credits, the Pools avoided penalties and achieved meaningful cost savings for partners.

This outcome reflects strong collaboration across Hafnia’s commercial, operational, and compliance teams, as well as constructive engagement with all Document of Compliance holders as regulations such as FuelEU come into full force.

In June 2026, Hafnia Pools further strengthened Partner engagement and alignment through its bi-annual Pool Board meeting, taking place during Posidonia in Greece.

Peter Kolding, VP Chartering Regional Trades & Pool Management, said: “As we move further into 2026, our focus remains on delivering consistent commercial results, strengthening the value proposition for all Pool Partners, and continuing to build on the close cooperation between our Chartering and Operations teams that underpins the success of the Hafnia Pools.

“I am encouraged to see that our commercial performance and efforts in staying close to our partners are paying off as we enjoy growing support from many of those same partners. It indicates that we are on the right path and energizes us to continue doing everything we can to improve even further.”

 

Photo credit: Hafnia
Published: 26 June, 2026

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