The extended EU ETS, which will come into force on 1 January 2024, will set an annual absolute limit on emissions of greenhouse gases (GHG) for vessels of 5,000 gt and above calling at EU ports. However, its implementation is creating tensions between shipowners and charterers, particularly surrounding the language within charter agreements to ensure a fair distribution of costs and legal risks.
Due diligence
Robert Hodge, General Manager at ITIC, believes that it is vital that ship managers take necessary due diligence to ensure any of these risks are mitigated.
“Ship managers will have an important role in managing the scheme for their owners. It is, therefore, vital that ship management agreements set out the responsibilities and liabilities for doing so. The EU ETS is likely to cost the industry billions in extra fees so ship managers and charterers should assess every aspect of the costs and legal risks associated with the scheme to ensure they are not left in a financial precarious position,” Hodge noted.
Clauses
The clauses aim to facilitate collaboration and provide clarity and certainty between parties as new regulations come into force, changing the way the industry operates to achieve compliance and cut emissions.
The most recent updates to the BIMCO SHIPMAN Emission Trading Scheme Allowances Clause 2023 ensure that the costs and responsibilities for obtaining, transferring and surrendering emission allowances for ships operating under an emission scheme in a ship management context.
“The purpose of the ETS clause for SHIPMAN is to allocate costs and responsibilities between owners and managers, thereby facilitating compliance with emission trading schemes. This includes the reporting of emission data, as well as the transfer and surrender of emission allowances for ships operating under an emission scheme,” says Stinne Taiger Ivø, Director, Contracts & Support at BIMCO.
The EU ETS comes as a result of the increasing regulatory landscape imposed by the International Maritime Organization (IMO) and the EU when it comes to reducing GHG for vessels transiting European waters and docking at European ports.
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Source : Off shore energy
