BIMCO has published a new Biofuel Clause for Time Charter Parties

BIMCO has published its new Biofuel Clause for Time Charter Parties 2026, aimed at addressing the contractual issues arising from the growing use of biofuels on ships.  Covering fuel standards, vessel compatibility, performance considerations and the allocation of risk, the clause aims to provides a structured contractual framework between owners and charterers where biofuels are supplied and consumed during a charter.

The introduction of the BIMCO Biofuel Clause for Time Charter Parties comes against the backdrop of increasing regulatory and commercial pressure on the shipping industry to reduce greenhouse gas emissions, alongside a growing uptake of biofuels as a lower-carbon alternative to conventional marine fuels.

A link to the BIMCO clause and Explanatory Notes is available here - Biofuel Clause for Time Charter Parties 2026

Key features of the BIMCO Biofuel Clause

The BIMCO Biofuel Clause has a number of key features, including:

Charterers’ right to supply biofuels

The clause gives Charterers the right to supply biofuel to the vessel, provided that such fuel meets specified standards set out in the clause.  Charterers may also propose to supply biofuels that fall outside those specified standards, but this requires the owners’ prior written consent. Before giving such consent, owners may require independent testing of the proposed fuel to confirm compliance with regulatory, classification society, and engine manufacturer requirements, with the cost of such testing borne by the charterers.

Fuel specifications and standards

A central component of the clause is the requirement that biofuels must meet recognised international standards, such as relevant ISO specifications, together with any additional requirements agreed in the charter party.  The clause limits the proportion of bio-based content in the fuel blend to an agreed percentage.  Where the bio-component consists of FAME or HVO, subject to certain specified exceptions, it must meet relevant industry standards (such as EN14214[1], ASTM D6751[2], or EN15940[3]).  Any alternative specification agreed between the parties must also satisfy applicable regulatory and technical requirements.

Compatibility and safety

All biofuel supplied under the clause is required to be stable, homogeneous, and suitable for consumption by the vessel’s engines and auxiliaries.  The owners warrant that the vessel is properly fitted, equipped, and approved to use the permitted biofuels and that the crew is appropriately trained to handle them safely.  Different fuel types, grades, and batches must be segregated in separate tanks, and comingling of fuels is only permitted with the parties’ prior agreement.  The owners are not obliged to use any fuel that does not meet the required standards or is otherwise unsuitable.

Off-specification biofuel and tank cleaning

Under the clause, charterers are responsible for any loss, damage, delay, or cost arising from a breach of the fuel quality and suitability requirements.  This includes liability for damage to the vessel, operational delays, and the costs of removing unsuitable fuel.  These liabilities apply except where the relevant issue has been caused by the owners’ fault.

Costs associated with tank cleaning required to facilitate the use of biofuel are also stated to be for the charterers’ account, where reasonably necessary. 

Performance and consumption

The clause acknowledges that biofuels may differ from conventional fuels in terms of energy content and combustion characteristics, which may in turn affect speed, fuel consumption and overall vessel performance.  It therefore addresses how such differences are to be treated contractually, including the potential need to adjust speed and performance warranties or consumption calculations.  Adjustments are permitted to be made either by applying agreed percentage factors or by using a formula based on the lower calorific value (LCV) of the biofuel relative to conventional fuel.  Under the clause the owners must provide supporting calculations. 

Similarly, if biofuel is not consumed within an agreed period, the owners have the option of requiring the fuel to be tested at the charterers’ cost.  If the biofuel remains compliant, then it must be used within a further mutually agreed period (the default is 30 days).  However, if testing shows the biofuel is non-compliant, Charterers are liable for resulting loss, damage, and associated costs (including off-loading), unless the delay in consumption was due to Owners’ fault.

Operational cooperation and information sharing

The clause requires ongoing cooperation between the parties.  Charterers must give reasonable written advance notice of their intention to supply biofuel, including details of its specification, quantity, and intended use, and must provide at least 72 hours’ advance notice with instructions for their intended time for commencement of consumption.  The owners, in turn, must keep charterers informed of the quantities of biofuel remaining on board, with both parties expected to cooperate in testing, resolving any fuel quality issues, and agreeing on operational matters such as fuel mixing.

Documentation and evidential requirements

The charterers must provide supplier documentation for the biofuel, including its LCV.  The clause allows either party to request independent laboratory testing to determine LCV, with costs borne equally between the parties.  Testing may also be required both before approval of non-standard fuels and where any issues arise, such as delays in consumption.  The clause also sets out that any standard sampling and analysis provisions under the charterparty apply equally to biofuel.

Practical Considerations and Assistance

Parties should continue to assess operational and technical risks when using biofuels on board ships.  Technical compatibility, fuel availability, and regulatory developments remain potentially fast-moving areas of uncertainty and development.  If parties incorporate the BIMCO Biofuel Clause for Time Charters 2026 into a charter party then, depending on the specific trade and vessel, the clause may require careful further negotiation, including completing the optional parts and sections where figures need to be inserted.  The BIMCO Clause will also need to be carefully considered in respect of how it interacts with existing charter party terms and operational practices.

If members or brokers require any assistance with charter party considerations or disputes regarding these issues, or would like to discuss further, please contact your usual FD&D claims handler.