FuelEU Maritime Clause for Memoranda of Agreement 2025

Background

The FuelEU Maritime Regulation is a part of the EU’s “Fit for 55” package intended to fight climate change by reducing greenhouse gas emissions in shipping.  It aims to achieve a reduction in the EU’s net greenhouse gas emissions by at least 55% by 2030. 

FuelEU Maritime sets well-to-wake greenhouse gas (GHG) emission intensity requirements on energy used on board ships trading in the EU from 2025. The yearly average greenhouse gas (GHG) intensity of all energy used on board, measured as GHG emissions per energy unit (gCO2e/MJ), needs to be below the required level. The GHG emissions are calculated from a well-to-wake perspective, including emissions related to extraction, cultivation, production, transportation of the fuel and emissions from energy used on board the ship. Under the Regulation, vessels’ GHG intensity rating is to be reduced in steps, with a 2% reduction in 2025 and up to, ultimately, an 80% reduction by 2050.

This clause has been developed to help parties comply with the EU’s FuelEU Maritime Regulation when buying and selling vessels.

The clause provides a clear contractual framework for allocating responsibilities, costs, and data-sharing obligations between sellers and buyers. 

Drafting Team

The FuelEU Maritime Clause for Memoranda of Agreement (MoAs) 2025 is the result of a collaborative and consensual process between owners, shipbrokers, a P&I Club and legal experts. BIMCO is grateful to the drafting team for their considerable time, effort and commitment in producing the FuelEU Maritime Clause for Memoranda of Agreement (MoAs) 2025:

• Francis Sarre, CMB Tech (Chairperson)
• Adam Emilianou, Eastern Pacific Shipping 
• Christoph Bruhn, Bruhn Shipbrokers 
• Peter Graff, Steem1960
• Sarah McCann, North Standard
• Andreas Grammes, Schachow Law Firm
• Keith Krut, Hannaford Turner Law Firm 

BIMCO Secretariat:

• Stinne Taiger Ivø
• Carl Wilhelm Lindahl
• Vasileios Patonis

 
As part of the development work, the subcommittee consulted a large group of stakeholders engaged in shipping and decarbonisation. BIMCO would like to thank them all for their support and valuable input to the process.

Explanatory Notes

These explanatory notes are intended to provide an insight into the thinking behind the FuelEU Maritime Clause for Memoranda of Agreement 2025. They also explain how the clause is intended to operate and the allocation of responsibilities and costs between the parties. If you have any questions about the clause, please contact us at contracts@bimco.org and we will be happy to assist.

Key Features of the Clause

Definitions

“FuelEU Penalty”: the reference to the “multiplier in this definition is to address situations where a vessel has a compliance deficit for two consecutive reporting periods or more during the charter period. Under Article 23(2) of FuelEU Maritime, the penalty shall be multiplied by 1 + (n -1)/10, where n is the number of consecutive reporting periods for which the vessel is subject to a FuelEU penalty.
“GHG Intensity”: the baseline is 91,16 g CO2 equivalent per MJ based on the MRV data for voyages performed to, between or from the EU/EEA. Under FuelEU Maritime, the vessels’ GHG intensity rating is to be reduced in steps, with a 2% reduction in 2025 and up to, ultimately, an 80% reduction by 2050.

“Voyage”: is defined under FuelEU Maritime by reference to the EU MRV (Regulation (EU) 2015/757 of the European Parliament and of the Council of 29 April 2015 on the monitoring, reporting and verification of carbon dioxide emissions from maritime transport, and amending Directive 2009/16/EC) which states that it is any movement of a vessel that originates from or terminates in a port of call.

It is important to note that the FuelEU Maritime applies differently to the following three types of voyages (Article 2(1)):

• Intra-European Union (EU)/European Economic Area (EEA) Voyages: in respect of the entirety of (100%) the fuels/energy used on voyages between ports of call under the jurisdiction of EU/EEA Member States
• Voyages to or from Outermost Regions: for voyages that start or end in an outermost region under the jurisdiction of a Member State, FuelEU Maritime applies to vessels in respect of 50% of the fuels/energy used
• International Voyages: for voyages between a port of call under the jurisdiction of a EU/EEA Member State and a port of call under the jurisdiction of a third country (or vice versa), FuelEU Maritime applies to vessels in respect of 50% of the fuels/energy used.

A "port of call" under FuelEU Maritime (as of the date of issuance of this clause) means a port where vessels stop to load or unload cargo or to embark or disembark passengers. However, the following are not considered a “port of call" (Article 3(10) of FuelEU Maritime):

• The ship stops in the port only for the purpose of:
  • refuelling
  • obtaining supplies
  • crew relief
  • dry-dock
  • making repairs to the ship and/or its equipment
  • taking shelter from adverse weather
• If the ship stops in the port because it is in need of assistance or in distress
• If the stop is rendered necessary by search and rescue activities
• If ship-to-ship transfers are carried out outside the port
• If containerships stop in a neighbouring container transhipment port which is listed in the implementing act under Article 2(2) of FuelEU Maritime.

Subclause (a) 

Under subclause (a)(i) the sellers warrant that at the time of delivery they have complied with all obligations applicable to the vessel under FuelEU Maritime. This includes reporting and monitoring requirements for the immediately preceding Reporting Period, as well as any applicable monitoring obligations for the current reporting period. The current reporting period is the reporting period during which delivery will take place and for which a partial FuelEU report must be submitted as per article 15(4)(b) of the Regulation.

Importantly, the obligation to submit the partial FuelEU report does not apply at the time of signing the MOA. This obligation arises later and is specifically addressed under subclause (b)(iv), once it becomes applicable to the vessel. Accordingly, the warranty in subclause (a)(i) pertains only to obligations applicable at the time of signing and does not extend to future reporting requirements that will be fulfilled post-delivery.

It is important to note that under subclause (a)(ii), the sellers are restricted from borrowing any compliance balance from the reporting period in which delivery occurs. This restriction aims at ensuring that the buyers will not be exposed to future liabilities resulting from the seller’s decision to borrow and is linked to the timing of the sale and the deadline for borrowing under the regulation. 
Under the Regulation, the decision to borrow compliance from the following year may be taken during the verification period. For example, if the MoA is signed before 30 April (which is the FuelEU deadline for borrowing) but delivery is scheduled after 30 April, the sellers would still fall within the permitted window to borrow advance compliance balance. If the sellers do so, then according to Article 20(2) of the Regulation, the “advance compliance balance multiplied by 1.1 shall be subtracted from the same ship’s compliance balance in the following reporting period”. In practical terms, this means that the sellers would be drawing compliance balance from the following reporting period, thereby shifting the financial burden of repaying the borrowed amount to the buyers, who will own the Vessel when that reporting period is accounted for.

For this reason, under subclause (a)(ii) the sellers provide a warranty that “from the date of this Agreement and until the time of delivery, they will not borrow any compliance balance from the reporting period in which delivery will occur.” This reporting period will be attributed to the buyers, as they will be the owners of the Vessel on 31 December, in accordance with Article 15(4)(c) of the Regulation.

Although subclause (a)(ii) prohibits the use of the borrowing mechanism, the clause deliberately does not restrict banking or pooling. It was considered that neither mechanism creates the same risk of shifting future compliance burdens onto the buyers. If the sellers choose to bank a positive compliance balance this is typically beneficial from a buyers’ perspective and does not create adverse carry over liabilities. What matters is that the sellers clearly communicate any intended banking actions, which the parties can address commercially during negotiations.

With respect to pooling, the subcommittee’s view is that the clause should not impose a restriction on the sellers’ ability to pool. If the timing of the sale permits pooling and the vessel is in deficit, the sellers may elect to pool the negative compliance balance to mitigate FuelEU penalties. Provided that any pooling is completed before delivery, it does not impose obligations on the buyers after delivery. This approach preserves the sellers’ operational flexibility. It should be noted that if a vessel is sold before the pooling window opens, then the seller may lose the opportunity to pool the vessel, unless special arrangements are made. If the seller wishes to retain the right to pool in those scenarios, then the parties should consider including explicit wording to this effect.

Subclause (b) 

This subclause deals with the obligations of the sellers regarding disclosure of information to the verifier and to the buyers. 

Subclause (b)(i) reflects the regulatory obligation of the sellers pursuant to article 15(4) of the Regulation to notify the verifier and provide all required information for the time during which it had responsibility for the operation of the ship. An important addition is the phrase “together with information in relation to banking, borrowing and pooling of any Compliance Balance” which makes it an obligation of the sellers to share this information as well with their verifier.

Subclause (b)(ii) refers to the information that must be disclosed to the buyers which include the “Compliance Balance, verified, and/or validated by the Verifier for the two previous Reporting Periods”. To provide more certainty, the compliance balance under subclause (b)(ii) should be verified where possible. For example, if the vessel is to be delivered in 2027:

• the compliance balance for 2025 should be verified
• if delivery occurs in early 2027, the 2026 compliance balance may only be validated, as the timing may not allow for verification.

Subclause (b)(ii) also includes the language “reflecting any pooling, banking or borrowing” to make clear that if any of these flexibility mechanisms has been applied, they shall be reflected in the compliance balance, and the buyers should be made aware accordingly.

The timing of sharing this information is commercially important and has been left to the parties to decide by inserting the number of days prior to the estimated time of delivery by which this information must be available to the buyers. 

Subclause (b)(iii) sets out the obligation of the sellers to notify the buyers in writing of the validated aggregated compliance balance at the time of notification and the estimated compliance balance at the estimated time of delivery. 

For the sake of clarity, it should be highlighted that the compliance balance that the sellers are obliged to notify under this subclause consists of two components. The first is the “known validated aggregated Compliance Balance at the time of notification” and refers to the cumulative compliance balance from the beginning of the reporting period up until the time of notification pursuant to this subclause. This figure will be known to the sellers, and it should be validated. The second component is the “projected estimated Compliance Balance until the estimated time of delivery” which covers the period from notification until the estimated time of delivery. These two components together constitute the compliance balance that shall be notified to the buyers and will serve as basis for the deduction or compensation mechanisms under subclauses (d) and (f) respectively. Parties may use the “[insert number of days]” field to align this notification with pre-delivery notices under the MOA. 

An independent third-party validator is to validate the information used in the calculation of the aggregate compliance balance to ensure accuracy. The independent third-party validator could be a FuelEU verifier or another service provider offering similar services relating to FuelEU Maritime. 

Whilst the information under subclause (b)(iii) is of a commercial nature, subclause (b)(iv) addresses the transfer of the underlying information and data to be contained in a partial FuelEU report as required under FuelEU Maritime. The timeline for providing the actual partial FuelEU Report has been set to one (1) month after delivery to align with the regulatory timeline as per article 15(4)(b) of the Regulation. Subclause (b)(iv) must be read in conjunction with subclause (c) as there may be occasions where the input from the buyers is necessary for the completion of the partial FuelEU report. Once the partial FuelEU report has been submitted and verified the sellers must provide a copy to the buyers within seven (7) days after receipt from the verifier. 

An important consideration is that the sellers may be a “one ship company” which has no assets except the vessel and is usually dissolved after selling the ship. Therefore, the issue of guarantees and security that may be provided to the buyers is important but has nevertheless been deliberately left outside the scope of the clause, leaving it to the parties to agree on appropriate arrangements based on the specific circumstances, available information, and their respective risk profiles. 

Subclause (c)

This subclause becomes relevant when information is required from the buyers in order for the sellers to be able to complete the partial FuelEU report. This information, for example the next port of call, speed, consumption and emissions related information, must be provided by the buyers in situations “where either the last port prior to delivery or the next port after delivery is a port of call for the purposes of FuelEU Maritime”. The phrase “for the purposes of FuelEU Maritime” is a reference to article 3(10) of the Regulation. 

In this context it is important to note that a voyage into the EU will only trigger FuelEU Maritime if the vessel is loading or discharging. If the vessel enters the EU but does not load or discharge—e.g., it enters for repairs—the emissions calculation differs. In such cases, the voyage into the EU may not be considered a commercial voyage, and emissions reporting requirements change accordingly.
A hypothetical scenario is that of a vessel that enters into an EU port for repairs (which is not considered a “port of call” under art. 3(10) of the Regulation), it is delivered to the buyers at that port, and the buyers subsequently order the vessel to load cargo at the same port (which is now considered a “port of call” under art. 3(10)). In this example the voyage into EU for repairs does not fall into the scope of the FuelEU. However, the subsequent loading of cargo makes this a “port of call” for the purposes of the Regulation and the voyage now falls within the scope of FuelEU. In these circumstances, subclause (c) comes into play and imposes an obligation on the buyers to provide “without undue delay any information as required under FuelEU Maritime for the time after delivery for the completion of the partial FuelEU report”.

In such cases, the buyers’ provision of post‑delivery voyage information without undue delay benefits both parties, as it enables timely completion of the sellers’ reporting obligations. Because a vessel can only be assigned to one company at a time in the FuelEU database, the submission and verification of the partial FuelEU report should be completed before the sellers release the vessel on the database. Accordingly, it is recommended that the verified partial FuelEU report be submitted prior to transferring the vessel to the buyers in the FuelEU system.

It should be stressed that while the emissions data must be documented and submitted by the sellers, the financial responsibility is already addressed under subclause (d). In practical terms, the buyers will only deduct the price agreed per tonnes of CO2 equivalent up until delivery, even if the sellers would have to report further emissions for reporting purposes. 

Subclause (d)

Subclause (d) is linked to subclause (b)(iii) and stipulates that if the compliance balance notified under subclause (b)(iii) is negative, then the buyers have the right to deduct a specified amount per tonne of CO₂ equivalent from the purchase price. The subclause requires the sellers to provide the calculation and independently validated data used to determine the FuelEU penalty to support the deduction.  

The parties are free to decide on the currency and amount per tonne of CO₂ equivalent that is to be deducted from the purchase price. However, if currency and amount are not inserted in subclause (d) then “an amount equal to the FuelEU Penalty per tonne of CO₂ equivalent, as calculated in accordance with FuelEU Maritime” is the default option. The FuelEU penalty is calculated in accordance with Annex IV of the Regulation and takes into account the compliance balance and the GHG intensity of the vessel for a given reporting period. The use of the regulatory penalty as the default amount ensures that the clause remains operational even when the parties do not insert commercial figures and future-proofs the clause against future amendments of the FuelEU Regulation.

The clause refers to “Banking Days” to align with standard sale and purchase practice, in which this term is a defined contractual term. Similarly, “Purchase Price” is capitalised because it is a defined term in the widely used MoA forms. These capitalisations ensure consistency with established S&P drafting and avoid uncertainty when integrating the FuelEU clause into a broader contractual framework.

Subclause (e)

If the vessel has had a negative compliance balance for two or more consecutive reporting periods, then the buyers have the right to deduct a lump sum reflecting their future exposure to the FuelEU multiplier. 

Subclause (e) is optional in its entirety and will not apply unless the parties insert the currency and amount in the field provided in the subclause. The intention of this subclause is to deal with the situation where the sellers selected to pay the FuelEU penalty as a way of compliance with FuelEU Maritime for two or more consecutive reporting periods prior to the sale of the vessel. Under FuelEU Maritime (Article 23(2)), a multiplier will be applied where the vessel has a negative compliance balance for two consecutive reporting periods or more. This multiplier will increase based on the number of consecutive reporting periods where a FuelEU penalty is paid i.e. 10% for the first year, 20% for the following and 30% for the following and so on. However, it is important to note that in accordance with the official guidance given by the EU in the document “Guidance on the FuelEU Maritime”, the multiplier will not apply in case of change of shipping company, ie if the ISM company changes following the sale, then the multiplier does not apply. It is only when the ISM company remains the same after the sale of the vessel, that the multiplier takes effect. 

This means that if the vessel was non-compliant for two years in a row, then the multiplier (10%) will already be added to the penalty in that second reporting period. For example, if the vessel had a negative compliance balance and chose to pay the FuelEU penalty for 2026 and 2027, then the interest applied on the penalty in 2026 would already be 10% x (FuelEU penalty for 2026) and the multiplier in 2027 would be 20% x (FuelEU penalty for 2027). Therefore, when the buyers take ownership of the vessel (in this example during 2027) the multiplier may be carried over. This is the exposure that this subclause is intended to capture. In order to tackle this problem, the parties can utilise this subclause (e) to agree on a lump sum deduction from the purchase price as a way of compensating the buyers for the effect of the multiplier. 

There are several ways of quantifying those liquidated damages, such as based on the fees for entering into a pool in order to make the vessel compliant the following year, the cost of bunkering with a biofuel or other alternative fuel or calculating an estimate of the FuelEU penalty for the vessel on the future expected trade to the EU/EEA using a fossil fuel emission factor. Thus, the subcommittee has left open both the amount and the currency to be agreed by the parties and also acknowledges that this may not be a perfect way of determining the precise amount of compensation.

It should be noted that subclauses (d) and (e) are intended to operate cumulatively. Each addresses a distinct aspect of FuelEU‑related exposure, and the deductions provided for under these provisions are not alternatives. Where both apply, the corresponding amounts are to be deducted in addition to one another.

Subclause (f) 

Subclause (f) is entirely optional and will not apply unless the parties insert the currency amount in the two fields provided in the subclause. The purpose of this subclause is to provide a compensation mechanism when the vessel is sold with a compliance balance surplus. 

The subclause stipulates that the buyers shall compensate the sellers for a positive compliance balance at delivery by an agreed amount per tonne of CO2 equivalent, subject to a maximum cap. If no currency or amount is inserted, the subclause does not apply. This subclause recognises the commercial value of positive compliance balances generated by the sellers. 

The parties may refer to a mutually agreed index to reflect the value of a compliance balance unit. While the use of such indices was discussed, it is ultimately for the parties to decide whether to adopt an index and, if so, which index to use.

Subclause (g) 

Subclause (g) applies only to containerships and passenger vessels, reflecting the scope of Article 6 of FuelEU Maritime, which imposes additional zero‑emission requirements for energy used at berth. Non‑compliance with these requirements may result in a FuelEU penalty, calculated in accordance with Article 23(5) of the Regulation.

This subclause provides a price‑adjustment mechanism for such cases. If the Vessel has failed to meet article 6 obligations for the current and/or the immediately preceding reporting period(s), the buyers are entitled to deduct from the purchase price an amount equal to the applicable FuelEU penalty, as determined under article 23(5). 

For sake of clarity, it is stated that subclause (g) is applicable only to container vessels and passenger vessels from 1 January 2030, consistent with the Regulation. 

Subclause (h) 

Subclause (h) stipulates that, upon delivery, the buyers assume full responsibility for FuelEU Maritime compliance. This includes rights and decision‑making authority relating to the banking, borrowing, and pooling of the vessel’s compliance balance. Although this reflects the legal position under the Regulation, the subcommittee considered it helpful to retain an explicit statement to avoid uncertainty.

Sale of a vessel with a time charter party attached

Where a vessel is sold with a time charter party attached, the parties should be aware that the allocation of FuelEU responsibilities under the MoA operates independently from any FuelEU allocation agreed under the charter party. In practice, the transfer of the vessel will normally be accompanied by a novation agreement (such as the BIMCO Standard Novation Agreement for the Transfer of Ownership) through which the buyer assumes the rights and obligations of the owner under the existing charter party. Any FuelEU related responsibilities arising under the charter should therefore be addressed in the novation documentation rather than in the MoA. 

The FuelEU Maritime clause for Memoranda of Agreement 2025 does not attempt to regulate the interaction between sale and purchase obligations and charter party responsibilities. Parties are encouraged to ensure that the charter party’s FuelEU provisions (for example the BIMCO FuelEU Maritime Clause for Time Charter Parties) are properly reflected in the novation so that operational and compliance responsibilities remain aligned across all contractual layers.

Copyright and Availability

Copyright in the BIMCO FuelEU Maritime Clause for Memoranda of Agreement 2025 is held by BIMCO.