Legal

EEXI Transition Clause For Time Charterparties

By January 18, 2022 No Comments

The International Maritime Organization (IMO) has a decarbonisation strategy in place and as a part of this it will introduce a new regulation which will come into force on 1st November 2022 with further requirements coming into effect in 2023 requiring all ships to calculate their EEXI (Energy Efficiency Existing Ship Index), this is part of the global measures to reduce greenhouse gas (GHG) emissions from shipping.

The EEXI measures CO2 emissions per transport work, purely considering the ship’s design parameters. EEXI does not require any measurement or reporting of true CO2 emissions while the ship is in operation. EEXI is the sister to EEDI, Energy Efficiency Design Index which has been in force since 2013. These indexes measure the same in practice; however, EEDI is applied to new ships while EEXI applies to existing vessels.

Ships weighing more than 400 Gross Tonnes will be required to calculate their attained EEXI and then meet a specific required EEXI which is based on a required reduction factor to reduce its carbon emissions over time. It is likely that many ships will be able to meet the required EEXI by engine power limitation (EPL) or shaft power limitation (SHaPoli) or by the installation of energy-saving devices.

Such power limitation modifications to a vessel will probably require cooperation between the shipowners and the charterers and as such, BIMCO (The Baltic and International Maritime Council) have developed a new clause to address these changes.

The certification of the EEXI is currently a one-time event meaning that once the vessel has been certified as required by the regulations the clause will not be required.  It deals with the relationship between shipowners and charterers focusing on compliance with the new regulation where technical modifications and logical amendments to charter party descriptions and warranties are required. The clause will be applicable for use where the ship will meet the requirements by implementing either EPL or SHaPoLi, if other modifications are required then this is for the owners and charterers to agree on separately. The clause further states that cost and loss of time resulting from EPL or SHaPoLi modifications are to be from the owner’s account, and it also provides for the vessels warranted maximum speed and consumption following such modification.

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