Are we good on the regulatory stuff?4 Sep 2024 17:58
Came across this article:
clydeco.com/en/insights/2024/05/biofuels-in-international-shipping-legal-issues
This part struck me:
Issues relating to sustainability, emissions savings, and certification
Whilst there are considerable potential benefits for shipowners and ship operators in using biofuels under the CII and EU regimes, they should be mindful that these potential benefits are conditional on biofuels meeting the applicable sustainability and emission reduction criteria, as well as on receiving appropriate certification. If the biofuel does not meet the applicable standards or have the appropriate certification, then, under the CII and EU regimes, the biofuels are likely to be treated as producing emissions equivalent to the fossil fuel type. This would place shipowners and ship operators opting for biofuels in no better position than if they had continued using fossil fuel bunkers.
For this reason, it is essential for parties to consider whether the contractual wording in their charterparties and in biofuel supply contracts adequately protects their position.
Where shipowners are time chartering a vessel and have agreed that time charterers may stem biofuels, shipowners should carefully consider whether their charterparty terms properly set out the specification and certification requirements for any biofuels stemmed. Here, shipowners could be exposed to the risk that their time charterers might not stem appropriately certified biofuel, such that they do not receive any preferential treatment under the CII and EU regimes as compared to the position if the vessel had consumed fossil based bunker fuel. If this were the case, shipowners could face unexpected penalties and suffer losses.
Is QED prepared for this? Genuine question..
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