On 5 July 2023, Regulation (EU) 2023/1804 on sustainable maritime fuels, known as FuelEU Maritime, was published in the Official Journal of the European Union. This regulation introduces a comprehensive regulatory framework to reduce greenhouse gas (GHG) intensity in maritime transport, an industry that now faces significant challenges in transitioning to a more sustainable and environmentally friendly model.

In recent months, there has been growing attention to sustainability regulations in maritime transport, with a proliferation of conferences and specialized publications in this field. However, even the most experienced in the sector cannot fully foresee the profound changes that the implementation of regulations such as FuelEU Maritime will bring. These regulations, designed to drive the transition to more sustainable fuels and operations with lower environmental impact, are intended to transform the operating model of maritime transport at all levels.

The demand for reduced emissions and the adoption of innovative technologies will mean that many current practices will be replaced by more efficient and sustainable approaches in the near future. This will not only redefine the way in which maritime transport is carried out, but also the skills required to operate in this sector.

The FuelEU Maritime Regulation: Key Aspects

Effective January 1, 2025, the FuelEU Maritime Regulation mandates a gradual reduction in GHG intensity for energy used by ships. The regulation applies to:

• All ships of 5,000 gross tonnage and above, regardless of flag, when calling at ports within the European Economic Area (EEA).
• Both EU and non-EU shipping operators, covering emissions from voyages to, between, and from EU ports, as well as at-berth activities.
• Monitoring and reporting of GHG emissions, including CO2, nitrous oxide (N2O), and methane (CH4), starting January 1, 2024.

Key stakeholders impacted by the regulation

The regulation significantly affects two main groups:

1. Shipowners
   • Responsible for compliance with regulations under the International Safety Management (ISM) Code.
   • Must ensure their operations adhere to the emission limits set by the regulation.
2. Charterers (Time charterers)
   • Typically responsible for procuring fuel and making operational decisions that impact emissions.
   • Must manage fuel-related compliance during the charter period.

The impact of this regulation is universal, affecting global shipping companies and logistics operators alike. For instance, companies like Maersk are already investing in green fuels and innovative technologies to meet these regulatory objectives and lead the sustainable transition.

The Role of the BIMCO FuelEU Maritime Clause

In response to these regulatory challenges, BIMCO has developed the FuelEU Maritime Clause for Time Charter Parties 2024, which aims to:

• Define the obligations of both shipowners and charterers.
• Enable charterers to manage compliance strategies, such as pooling, banking, or borrowing GHG credits.
• Ensure shipowners fulfill their regulatory responsibilities.

The primary responsibility for compliance lies with the shipowner or the designated “company” under the ISM Code, which could include ship managers or bareboat charterers. However, charterers, under time charter agreements, typically handle fuel procurement and operational decisions that affect emissions. This makes it critical for both parties to adopt the FuelEU Maritime clauses to allocate responsibilities clearly and mitigate potential risks.

For charter parties, specific clauses addressing the FuelEU Maritime Regulation are essential to avoid ambiguities that could lead to disputes. For example:

• Emission monitoring obligations: Specify which party is responsible for monitoring and reporting emissions data to authorities.
• Fuel procurement: Define the quality and type of fuels to be used during the charter period, ensuring compliance with regulatory requirements.
• Cost allocation: Address how costs associated with emissions reductions, such as purchasing low-carbon fuels or GHG credits, are to be shared between the parties.

Practical milestones for implementing FuelEU Maritime Clauses in contracts

• 2024: Integrate BIMCO FuelEU Maritime Clause into all new charter parties to define responsibilities for emissions and fuel compliance.

• Early 2025: Implement MRV (Monitoring, Reporting, Verification) systems for GHG emissions (CO2, CH4, N2O) on ships over 5,000 GT.

• Mid-2025: Conduct audits to ensure obligations under contracts and regulations are being met.

• 2026: Secure contracts for low-carbon fuels like biofuels or e-methanol to support charterer obligations.

• 2030: Retrofit vessels and optimize operations to meet the 20% GHG reduction target.

Key takeaways

• Define roles and responsibilities clearly in contracts, particularly in charter parties,  to address compliance requirements effectively. 
• Mitigate risks by incorporating clauses that address potential penalties for non-compliance.
• Review and adapt existing contracts to align with the new regulatory demands.

At our law firm, Marlin Blue, we specialize in helping shipping companies, charterers, and logistics operators align their contracts with evolving regulatory demands. From integrating the BIMCO FuelEU Maritime Clause into your charter parties to conducting compliance audits, we offer tailored legal solutions to safeguard your operations and mitigate risks.

Don’t leave your compliance to chance. Contact us today for expert legal advice on ensuring your contracts meet the requirements of FuelEU Maritime