Newsletter
Three adjustments to the BIMCO FuelEU Clause that owners should settle before the next fixture, and what to do when a charterer is slow to decide on pooling.
At our FuelEU webinar earlier this month, we asked our audience a simple question: who’s responsible for FuelEU compliance - the owner, the charterer, or the Document of Compliance holder? Most said they were confused about the responsibilities, but knew the basics.
Here’s the short version. The compliance obligation sits with the Document of Compliance holder, usually the owner. The charterer, however, often makes the decisions that drive that obligation up or down, such as fuel choice, and in some cases whether the vessel joins a pool. Getting the charterparty right is how an owner maintains some control over an outcome they’re legally responsible for.
There are three adjustments to the BIMCO FuelEU Clause worth making before you fix your next charterparty:
Set a realistic deadline for the charterer’s pooling decision. The standard clause’s default notice period is just seven days before 30th April. In practice, that’s rarely enough time to register a pooling instruction properly.
Agree upfront which biofuels the charterer can use, and require proof of sustainability. Without this agreed in advance, an owner can end up with a biofuel blend used on board that’s not properly documented, putting the compliance surplus generation at risk.
Set out clearly what should happen to any compliance surplus, and agree a compensation rate and a cap. If the vessel ends up in deficit instead of surplus, agree in advance who should cover this cost.
These are all adjustments to make at the negotiating stage. But many owners are already partway through a long-term charterparty. They’ve already given the charterer the right to pool the vessel’s compliance balance, and now they’re waiting on a charterer who’s in no rush to decide. For that situation, we offer a different kind of protection: owners can join the Ahti Pool now, and withdraw at no cost if the charterer doesn’t choose pooling. You stay covered either way. Interested in this option? Discover more in a meeting with our team.
Susbcribe to The Ahti Currents monthly newsletter on LinkedIn.