As the shipping industry intensifies its focus on energy efficiency, clear and balanced standard contractual frameworks for vessel retrofit projects are becoming increasingly important. BIMCO is well advanced in developing its Energy Saving Device Retrofitting Addendum, a document designed to give shipowners, charterers a reliable and practical tool for enabling retrofit projects under time charter parties.
The addendum will address one of the more complex contractual challenges in shipping today: how to fairly allocate the costs, risks and benefits of installing energy saving devices on vessels already in service. A central feature of the document will be a cost and benefit sharing mechanism, encouraging both shipowners and charterers to engage constructively in retrofit initiatives whilst providing clarity on how performance outcomes and financial responsibilities are distributed between the parties.
A balanced and representative process
The addendum is being developed by a dedicated subcommittee operating under BIMCO's Documentary Committee. The subcommittee has been deliberately composed to reflect the full spectrum of relevant interests, bringing together shipowners, charterers and P&I representatives. This balanced composition is central to the BIMCO process and ensures that the perspectives of all key stakeholders are considered as the addendum takes shape.
Alongside the subcommittee, BIMCO has established an industry wide sounding board, drawing on stakeholders with relevant experience in retrofit technologies, performance assessment and energy efficiency measures. The sounding board provides an additional layer of scrutiny and practical input, helping to ensure that the final document reflects commercial realities across different vessel types and trades.
"The process is well underway and progressing at a good pace. The subcommittee is currently considering all the feedback received from BIMCO's Documentary Committee at the last Documentary Committee meeting in April and from the industry wide sounding board. That input is of great assistance in our work to find practical and balanced contractual solutions for retrofit projects, and we are committed to producing a document that the industry can rely on," says Mattias Kjellberg of Stena Rederi AB, Chairperson of the subcommittee.
Final stages
The project is now approaching its final stages, with the subcommittee focused on ensuring that the addendum achieves the right balance across a number of dimensions. "We are at the final stages of the project, and the focus is firmly on striking the right balance. That means not only finding common ground between shipowners and charterers but also ensuring that the document is both legally sound and practical to use, without becoming overly complex. It is a delicate task, and one the subcommittee is working hard to achieve," says Keith Dawe, energy transition and decarbonization lead for Cargill Ocean Transportation.
When finalised, the addendum will be a document written by the industry and for the industry, reflecting the thorough and balanced process that underpins all of BIMCO's contractual work.
For further information about the Energy Efficiency Retrofit Addendum, please contact Carl Lindahl or Indu Chitran.
