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Gard on FuelEU: BIMCO’s new clause and its implications

Oliver Goossens takes a closer look at certain issues that owners and charterers should be mindful of when incorporating BIMCO FuelEU clause wholesale into their charterparties.

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Maritime protection and indemnity (P&I) club Gard on Thursday (19 December) published an insight on BIMCO’s long-awaited FuelEU clause that was published last month, which includes alternative bunker fuels.

The following are excerpts from the article written by Oliver Goossens:

BIMCO’s long-awaited FuelEU clause has now been published. This is a helpful and welcome starting point for Owners and Charterers to agree how calculations and costs will be dealt with under their charterparties. However, as it does not cover everything in detail, Owners and Charterers should be mindful of certain issues when incorporating this clause wholesale into their charterparties. This article takes a closer look at these issues, and where parties may wish to consider adding to or amending the standard wording.

Alternative fuels

Sub-clause (c) is intended to enable Charterers to supply biofuels or other alternative fuels to the vessel to comply with FuelEU requirements. Parties should remember that any agreement to supply biofuels, or any other compliance technologies, may require corresponding amendments to speed and performance warranties, bunker specifications and potentially provisions for on-board fuel trials, tank cleaning / preparation as well as agreement on the time and cost for these. A good starting place for agreement to burn alternative fuels is class and engine manufacturers’ comments whose approvals are likely to be required from Owners’ H&M insurers.

Reporting of Compliance Balance on delivery

Sub-clause (a) requires Owners to inform Charterers upon delivery of the Vessel’s compliance balance for the previous two reporting periods. ‘Reporting period’ is defined in the clause as from 1 January to 31 December.

This transparency is necessary to allow Charterers to understand how any penalties may be calculated in future years. Under the FuelEU regulation, a negative compliance balance in consecutive years will increase the size of the penalty payable by the vessel – 10% for the first year, 20% for the following year and so on. So a Charterer needs clear information on what previous balances have been to know what their exposure may be.

If a Charterer takes over a Vessel which had a negative compliance balance in the previous year under the previous charter, and then proceeds to register a negative compliance again, the Vessel will be left with a 10% extra (‘multiplier’) which arises partly because of a previous charterers’ performance. Ideally therefore a Charterer taking over such a ship will seek to negotiate terms so that the effect of a multiplier is not for their account.

Conclusion

The BIMCO clause provides a starting point for how the various mechanisms of the FuelEU regulation could work under a charterparty. Given that the industry is still familiarizing itself with how things will work in practice, the BIMCO clause is helpful for negotiations but it is not a panacea for all parties. There will still need to be some careful thought on how this clause should be amended in order to fit different parties’ needs and their plans for how to use vessels operating in the EU. 

Note: The full article by Gard can be found here. 

Related: BIMCO adopts FuelEU Maritime clause for charter parties
Related: OceanScore reviews BIMCO FuelEU clause for time charter parties

 

Photo credit: Guillaume Périgois on Unsplash
Published: 23 December, 2024

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LNG Bunkering

PIL’s LNG dual-fuel boxship “Kota Elok” arrives in Singapore on maiden call

As the first of 13 new 13,000 TEU vessels joining its fleet, Kota Elok is equipped to operate on LNG and low-sulphur fuel oil that helps reduce our greenhouse gas emissions.

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July 21, 2026

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PIL's LNG dual-fuel boxship “Kota Elok” arrives in Singapore on maiden call

Singapore-based Pacific International Lines Pte Ltd on Monday (20 July) said its first 13,000 TEU LNG dual-fuel container vessel, Kota Elok, recently made her maiden call to Singapore on 15 July.

As the first of 13 new 13,000 TEU vessels joining its fleet, Kota Elok is equipped to operate on liquefied natural gas (LNG) and low-sulphur fuel oil that helps reduce our greenhouse gas emissions. 

The vessel also incorporated energy-saving features and digital technologies to reduce fuel consumption and enhance operational performance, as well as a bow windshield to improve aerodynamics, contributing to improved fuel efficiency and lower emissions over the course of long-haul voyages.

“Following Singapore, Kota Elok will continue her voyage on our East Coast Service 1 (ES1) route to South America, calling at ports in Brazil, Uruguay, and Argentina before returning to Asia,” the company said in a social media post. 

Kota Elok also became PIL’s first vessel to receive Lloyd’s Register certification for compliance with the IACS UR E26 and UR E27 cyber security requirements.

Developed by the International Association of Classification Societies (IACS), UR E26 and UR E27 are mandatory cyber resilience requirements for newbuild vessels contracted from 1 July 2024. 

 

Photo credit: Pacific International Lines
Published: 21 July, 2026

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LNG Bunkering

CIMC SOE secures order for 12,000-cbm LNG bunkering vessel from Sinopec Clean Energy

Once operational, the vessel is expected to strengthen Sinopec’s domestic coastal LNG bunkering network and help address gaps in China’s alternative fuel bunkering infrastructure.
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July 21, 2026

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CIMC SOE secures order for 12,000-cbm LNG bunkering vessel from Sinopec Clean Energy

China’s Nantong CIMC Sinopacific Offshore & Engineering Co., Ltd. (CIMC SOE) recently signed a contract with Sinopec (Beijing) Clean Energy Co., Ltd. to build a 12,000-cubic metre (m3) LNG bunkering vessel, according to Chinese maritime media.

The vessel is scheduled for delivery in 2028 and will support Sinopec’s efforts to expand its presence in the marine clean energy sector.

Once operational, the vessel is expected to strengthen Sinopec’s domestic coastal LNG bunkering network and help address gaps in China’s LNG bunkering infrastructure.

With this signing , CIMC Pacific Offshore Engineering’s LNG bunkering vessel orderbook is further strengthened, maintaining its leading position in the global market for small and medium-sized LNG bunkering vessels.

The contract also marked another milestone for CIMC SOE, which has seen a sharp increase in orders and business performance this year amid a surge in domestic LNG vessel demand.

 

Photo credit: Nantong CIMC Sinopacific Offshore & Engineering
Published: 21 July, 2026

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Nuclear

ABS awards AiP to Korean institute for SMR-powered container ship concept design

KRISO says AiP recognises the technical feasibility and safety of its concept design, marking an important milestone toward the development of next-generation nuclear-powered commercial ships.
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July 21, 2026

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ABS awards AiP to Korean institute for SMR-powered container ship concept design

Korea Research Institute of Ships & Ocean Engineering (KRISO) on Thursday (16 July) received Approval in Principle (AiP) from the American Bureau of Shipping (ABS) for its concept design of a 15,000 TEU Small Modular Reactor (SMR)-powered container ship utilising Molten Salt Reactor (MSR) technology.

KRISO said the AiP recognises the technical feasibility and safety of its concept design, marking an important milestone toward the development of next-generation nuclear-powered commercial ships.

“This achievement demonstrates international recognition of KRISO’s technological capabilities in the rapidly evolving field of nuclear-powered shipping, supporting the transition toward low-carbon maritime transport,” it said. 

Building on this milestone, KRISO will continue advancing basic and detailed ship design, paving the way for future demonstration and commercialisation of SMR-powered vessels. 

Through continued R&D and international collaboration, KRISO remains committed to strengthening next-generation maritime technologies and contributing to the safe deployment of nuclear propulsion in the maritime industry.

 

Photo credit: Korea Research Institute of Ships & Ocean Engineering
Published: 21 July, 2026

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