BIMCO’s EEXI
DEADLINE LOOMING
By Siddharth Mahajan, Senior Loss Prevention Executive and Wan Jing Tan Singapore both from Gard P&I Club based in Singapore
The deadline for compliance with the IMO’s Energy Efficiency Existing Ship Index (EEXI) is looming. Are charterparties flexible enough for the transition phase? How should parties approach the new time charterparties which they are entering into to cater for the vessel’s EEXI compliance?
The IMO aims to reduce the carbon intensity of shipping by at least 40% by 2030, and is pursuing a reduction of some 70% by 2050, compared to 2008 levels. To date the IMO has implemented a number of measures to steer the industry towards its climate goals on the reduction of greenhouse gasses, such as introducing the Energy Efficient Design Index (EEDI), and regulations for nitrogen oxides (NOx) and sulphur oxides (SOx). Last year the IMO adopted regulations to improve
the efficiency of vessels. One of the new measures introduced was the Energy Efficiency Existing Ship Index (EEXI) which is primarily targeted at older and less efficient tonnage. Many have labelled it as the “ticket to trade” post 2023.
To assist the industry in managing their charterparty risks during the transition phase, BIMCO recently issued the EEXI Transition Clause for Time Charterparties, which is timely and helpful and therefore a welcomed clause. It is the first of a series of BIMCO’s carbon clauses. BIMCO will also be issuing clauses on Emissions Trading Schemes (ETS) and the Carbon Intensity Indicator (CII) regime. In this article we focus on the EEXI Transition clause and how it can be tailored to better suit parties’ intentions.
Setting the stage: Introducing IMO’s technical decarbonisation measure - EEXI
EEXI is an extension of the Energy Efficiency Design Index (EEDI) framework to bring the design efficiency of existing tonnage on par with new ships. It is a measure of the ship’s energy efficiency. A vessel’s EEXI is dependent on its design that is fixed, and not on any operational factors that may vary, for which there is another metric, CII (Carbon Intensity Indicator). EEXI in simple terms is CO2 emissions divided by transport work and is expressed in grams-CO2 / ton mile. A simplified formula is shown here:.
The Report • June 2022 • Issue 100 | 77
transition clause for time charterparties
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