New shipping carbon cut regulation will create 'raft' of challenges: BIMCO

London (Quantum Commodity Intelligence) – A proposed change to carbon regulations in shipping is likely to create a raft of commercial and contractual challenges, said the industry body BIMCO Friday, and the NGO is drafting new charter party clauses to help operators comply with the new regime.

The main driver for the initiative are amendments by the International Maritime Organisation to chapter 4 of MARPOL Annex VI, due to come into force in 2023 if adopted, which will tightly regulate the energy efficiency and carbon intensity of ships.

The chapter in question makes it mandatory for new ships to follow rules for efficient design and operation and the proposed changes would create more stringent targets via a new Energy Efficiency Existing Ship Index (EEXI) and carbon intensity indicator (CII).

The changes will be put forward for formal adoption at the 76th Marine Environmental Protection Committee session, to be held June 10-17.

The changes could require shipowners to reduce engine power and speed as well as reduce cargo intake, while any carbon levies will also need to be dealt with within contract terms.

"Although carbon levies could be considered a 'tax' for the purposes of charter parties and therefore covered by existing clauses in standard forms, it may be that a more prescriptive approach is called for," said BIMCO in a statement.

BIMCO's Documentary Committee will discuss the draft carbon clauses over the summer and review them for possible adoption in September.