Shipping industry organisation BIMCO has published a new standardised contractual framework designed to bring clarity to the use of biofuels under time charter agreements, according to Ship & Bunker.
The BIMCO Biofuel Clause for Time Charter Parties 2026 was released on Thursday, offering the industry a consistent set of contractual terms as vessel operators and charterers increasingly explore lower-carbon fuel options.
What the Clause Covers
According to Ship & Bunker, the clause sets out the responsibilities of both shipowners and charterers across the full lifecycle of biofuel use onboard — from supply and handling through to storage and consumption.
Key provisions include:
- Fuel specifications aligned with ISO standards
- Sampling and testing procedures
- Terms addressing fuel quality and engine compatibility
- Liability provisions for non-compliant fuel
- Requirements around tank cleaning and fuel segregation
- Considerations for the limited storage life of biofuels
Addressing the Energy Content Challenge
One of the more operationally significant elements of the new clause is a mechanism designed to adjust vessel speed and fuel consumption warranties when biofuels with differing energy content are used. As Ship & Bunker notes, this provision is intended to ensure that performance guarantees under charter party agreements remain equitable when fuel specifications vary from conventional marine fuels.
Industry Collaboration Behind the Framework
BIMCO stated the clause was developed with contributions from shipowners, charterers, fuel experts, and a P&I club, reflecting broad industry input. The aim, according to the organisation, is to support the maritime sector’s ongoing transition toward lower-carbon marine fuels.
Does This Matter to You?
The absence of standardised contractual language around biofuels has long been a friction point in commercial shipping. Disputes over performance warranties, fuel quality responsibility, and operational compatibility have created uncertainty for those negotiating charter agreements. This clause directly addresses that gap.
For anyone involved in chartering, fuel procurement, or voyage planning, the availability of a BIMCO-backed standard clause removes the need for bespoke contractual negotiations on biofuel terms and provides a common reference point for both sides of a charter agreement. The inclusion of P&I club input also signals that liability considerations have been factored into the framework, which is meaningful for risk management in fuel-related disputes.
As biofuel uptake continues to grow in response to decarbonisation regulation, having a recognised clause in place becomes increasingly relevant to day-to-day commercial operations.
Gulf Bunkering does not provide operational or security guidance. This article is for informational purposes only. Operators should consult flag state authorities, P&I clubs, and relevant advisories for decisions relating to transit planning.
Sources: Ship & Bunker
