Addressing the Challenges of Biofuels in Shipping: BIMCO Forms New Subcommittee

Shipping association BIMCO has taken a proactive step towards addressing the legal and operational challenges posed by the growing use of biofuels in the maritime industry. In response to regulatory frameworks shaping the future of shipping, such as the EU ETS, FuelEU Maritime, and the upcoming IMO Net-zero Framework measures, ship owners and operators are increasingly turning to biofuels as a means to reduce emissions.

Recognizing the complexity of integrating biofuels into charter agreements, BIMCO has announced the formation of a new subcommittee tasked with developing a Biofuel Clause for Time Charter Parties. This clause aims to provide clarity on issues related to fuel quality, engine compatibility, liability, and overall operational challenges associated with the use of biofuels.

The subcommittee, consisting of shipowners, charterers, P&I representatives, and technical experts, convened for the first time on April 7, 2025. Their primary focus is on defining the scope and standards for biofuels, outlining supply and handling procedures, and ensuring alignment with performance expectations and regulatory obligations.

One of the key considerations of the new clause will be the practical aspects of biofuel use, including blending with conventional fuels, onboard storage, and the impact on speed and consumption warranties. The goal is to create a flexible and robust contractual solution that supports compliance with emissions regulations while maintaining vessel reliability.

BIMCO anticipates that a draft of the Biofuel Clause will be presented at its Documentary Committee meeting in October 2025. Once adopted, this clause is expected to provide much-needed clarity for charterers and owners navigating the transition to low-carbon operations in the maritime sector.