As EEXI relates to a vessel’s technical parameters, the assumption is that the owner would primarily be responsible for ensuring the vessel has achieved its required EEXI in time for the 2023 survey deadline. In December 2021, BIMCO published the EEXI Transition Clause for Time Charterparties (the ”EEXI Clause”). The EEXI Clause requires the owner to make EEXI Modifications (meaning any physical or technical modifications required to bring the vessel in compliance with the EEXI) to the vessel prior to 1 January 2023. The EEXI Clause expressly covers the owner’s right to take the vessel out of service for EPL or ShaPoLi installation and stipulates that the cost of such EPL/ShaPoLi modifications and any actual loss of time due to the installation will be for the account of the owner.
Following EPL/ShaPoLi modifications, the owner would notify the charterer of the vessel’s estimated new speed and consumption figures. If the estimated new speed and consumption figures are less than those under the existing charterparty performance warranties, the EEXI Clause provides that the new estimates will replace the figures in the existing warranties. There is also a corresponding obligation on the charterer not to operate the vessel at a speed which would exceed the vessel’s new maximum speed.
The EEXI Clause clearly anticipates that the most widely adopted method for attaining EEXI compliance will be installation of EPL/ShaPoLi. The guidance notes to the EEXI Clause also state that (i) in most cases, it is expected that modifications could be carried out during service without appreciable loss of time to the charterer and (ii) the rationale for allocating the costs solely to the owner is based on the understanding that the owner will choose the type of modifications to be made, as it would be inappropriate for the charterer to have a say.
The EEXI Clause does not expressly cover non EPL/ShaPoLi modifications, such as engine fuel modifications, and the current position under the EEXI Clause requires the charterer’s prior consent for any non EPL/ShaPoLi modifications. For many vessels, EPL/ShaPoLi modifications will be sufficient to meet EEXI compliance and will contribute to reducing the CII but EPL/ShaPoLi modifications alone will not be enough to meet a vessel’s continually reducing CII targets. If, at this stage, an owner were looking to implement more substantial modifications ahead of January 2023 to tackle both EEXI and longer term CII reduction, the EEXI Clause falls short. Given that the CII is an ongoing obligation that relates to the vessel’s operation, a charterer’s and/or manager’s role will also be key to implementing the vessel’s carbon reduction measures. BIMCO is due to publish a CII clause in May 2022 and it will be interesting to see how additional technical and operational modifications will be addressed and how the burden of maintaining compliance is allocated between the parties.