I would not accept a biofuel clause as a green add-on until the fuel, tank, warranty, testing, redelivery and FuelEU economics are priced line by line.
Biofuel is now a charter-party cost allocation problem
BIMCO’s 2026 clause gives owners and charterers a practical starting point, but it also moves several technical fuel issues into the commercial bargain. The owner needs to know who pays when the blend changes, the tanks need cleaning, the fuel becomes unstable, the vessel burns more fuel, warranties move, or biofuel is left on board at redelivery.
Biofuel sounds simple when it is described as a drop-in fuel. The charter-party reality is more complicated. A blend such as B24 or B30 can affect tank preparation, segregation, storage life, fuel testing, compatibility, engine handling, bunker records, speed and consumption warranties, and the commercial value of any remaining fuel.
Owners should not treat the new clause as a document to paste into the charter without review. It is more like a pricing checklist. The parties need to decide which blend is allowed, which standards apply, which tanks can carry it, which evidence proves quality, which party controls the consumption window, and which party captures any regulatory value.
Pricing Rule
Biofuel should be priced as fuel plus optionality plus handling risk. The premium may be justified by FuelEU value or customer emissions goals, but the owner should not absorb hidden costs created by the charterer’s fuel choice.
Ten costs owners should price before accepting the clause
① Blend percentage and vessel approval
The blend percentage is not a routine blank. Higher blends may create different fuel handling, engine, seal, filter, cold-flow, storage, and documentation concerns. The owner needs to know whether the vessel, engine maker, class position, fuel system, crew training, and onboard procedures can support the proposed blend.
The clause gives structure around acceptable specifications and owner consent where fuel falls outside agreed limits, but the commercial negotiation should go further. A charterer may want flexibility to buy the cheapest compliant blend, while the owner wants certainty that the ship will not become the test platform for an unfamiliar product.
② Tank preparation and cleaning time
Biofuel can require tank preparation before supply, especially if previous bunkers or residues create contamination, quality or compatibility risk. Tank cleaning is not only a cleaning invoice. It can mean off-hire, crew workload, sludge disposal, gas-freeing, survey attendance, tank entry controls, and reduced usable fuel capacity.
Owners should price whether the vessel is already biofuel-ready or whether the charterer’s fuel choice requires preparation. If conventional fuel supplied earlier by the charterer later makes tank cleaning necessary before biofuel can be used, the cost allocation needs to be clear before the bunker order is placed.
③ Fuel stability and storage life
Biofuels generally have a shorter storage-life concern than conventional fuel. That makes the consumption window commercial. If the charterer orders biofuel but the vessel’s voyage pattern does not consume it fast enough, the owner may be left with fuel that needs testing, careful handling or debunkering.
The BIMCO framework uses an agreed consumption period, with a default period if the parties leave the blank open. Owners should not rely on the default if the trade pattern is unusual, bunkering is unpredictable, or the vessel may sit idle with biofuel in tanks.
④ Sampling and independent testing evidence
Biofuel disputes will often depend on evidence. Owners need a clean sampling process, a clear binding sample, laboratory rights, BDN information, fuel specification, supplier LCV, blend details, sustainability documents, and a record of how the fuel was handled after delivery.
Standard fuel testing language may apply, but owners should make sure the scope is broad enough for biofuel-specific disputes. Testing that proves basic specification compliance may not prove stability, compatibility, storage-life suitability or regulatory value.
⑤ Incompatibility and commingling risk
Biofuel should not be treated as a harmless addition to whatever is already on board. Different grades, batches, specifications and residues can create incompatibility or stability concerns. The clause recognizes segregation, natural tank segregation, and written agreement for commingling.
Owners should price the capacity consequence. Segregating batches may reduce usable bunker capacity or create operational constraints. Even unpumpable quantities can matter if the biofuel quantity is small enough that remaining residues become significant.
⑥ Lower calorific value and extra tonnes consumed
Biofuel can carry lower energy content than the reference fuel behind the vessel’s speed and consumption warranties. That means the ship may need more tonnes to perform the same work, or may need a warranty adjustment so the owner is not accused of underperformance caused by the charterer’s fuel choice.
Owners should request supplier-documented LCV and consider whether independent testing is needed. The commercial question is simple: if a lower-LCV fuel is supplied, who pays for the extra quantity burned to deliver the same voyage result?
⑦ Speed and consumption warranty exposure
Speed and consumption warranties are one of the most important commercial issues in the clause. If the charter party warranties were drafted around HFO, VLSFO or MGO, they may not fit biofuel without adjustment. A failure to adjust can create claims even when the vessel performs reasonably on the supplied fuel.
Owners should prepare the calculations before consumption starts, not after a dispute begins. If the vessel cannot maintain the original warranty because of LCV and density, the owner needs the right to issue an adjusted speed warranty with supporting documentation.
⑧ Debunkering and non-compliant remaining fuel
Biofuel that is not consumed in time may need testing. If testing shows the fuel is no longer compliant, the next question is debunkering. That can mean port approval, barge availability, waste classification, tank cleaning, fuel disposal, off-hire, paperwork, and potential disputes over fault.
The owner should avoid carrying debunkering risk for fuel chosen by the charterer unless the failure to consume it was caused by the owner’s fault. This is one of the clause’s most important cost-allocation areas because debunkering can be far more expensive than the bunker stem suggested.
⑨ Redelivery bunkers and remaining biofuel value
Redelivery with biofuel remaining on board can create a valuation problem. Biofuel may be more expensive than conventional fuel, may have shorter storage life, may carry regulatory value, or may be commercially awkward for the owner’s next employment.
BIMCO’s clause allows the parties to insert a price for biofuel remaining on board at redelivery. Owners should not leave this blank without thinking through the next trade. A vessel redelivered with aging biofuel may receive a different economic result from a vessel redelivered with fresh fuel and useful FuelEU value.
⑩ FuelEU value and sustainability documentation
FuelEU Maritime can make biofuel commercially valuable beyond propulsion. If the fuel improves the vessel’s GHG intensity balance, the benefit may be worth money to the charterer, the owner, or the next employment. But value exists only if the fuel has the right documents, sustainability evidence, BDN details, LCV, GHG intensity and verifier-acceptable records.
Owners should decide who receives the FuelEU benefit and who carries the risk if the claim fails. A fuel premium paid for compliance value can become a dead cost if the Proof of Sustainability, Proof of Compliance, database record, BDN or energy-content evidence is missing.
Biofuel charter-party exposure calculator
This tool helps owners estimate whether a proposed biofuel stem creates enough operational or contractual exposure to require a price adjustment, stronger clause wording or a separate side letter.
Biofuel Clause Exposure Calculator
Adjust the assumptions to estimate the net biofuel cost, the LCV-driven consumption effect and the owner’s risk band.
Model note: This screening tool does not replace charter-party review, fuel testing, class or engine-maker guidance, FuelEU verification, sustainability certification review, P&I advice or bunker supplier due diligence.
Owner pricing table for the 2026 clause
The clause gives a structure, but the economics depend on the blanks, side agreements and evidence package.
| Clause issue | Owner exposure | Documents to demand | Pricing response |
|---|---|---|---|
| Blend percentage Bio component and fuel type |
Higher blend may create system, engine, cold-flow or approval issues. | Fuel specification, blend ratio, component standard, engine-maker comfort. | Blend cap and prior approval right. |
| Tank preparation Cleaning and readiness |
Cleaning cost, sludge disposal, time lost and reduced usable capacity. | Tank history, prior fuels, cleaning plan, onboard readiness confirmation. | Charterer-paid cleaning and time allocation. |
| Stability Storage life and consumption window |
Biofuel left too long may need retesting or debunkering. | Supplier storage guidance, consumption instructions, voyage pattern. | Custom consumption period and retesting cost language. |
| Sampling Evidence for disputes |
Weak samples can make quality, compatibility or LCV disputes hard to prove. | BDN, retained samples, lab reports, LCV statement, sustainability evidence. | Testing scope, binding sample and time-bar language. |
| Incompatibility Segregation and commingling |
Fuel may become unstable if mixed with unsuitable residues or batches. | Tank plan, onboard ROB, compatibility tests, commingling instructions. | Segregation rights and written commingling approval. |
| LCV Lower energy content |
More fuel may be needed to maintain output. | Supplier LCV, independent lab option, density data. | LCV adjustment factor or agreed percentage adjustment. |
| Warranties Speed and consumption |
Owner may face performance claims caused by charterer-supplied fuel. | Warranty basis, calculation sheet, route data, weather exclusions. | Adjusted speed and consumption warranty before consumption. |
| Debunkering Non-compliant remaining fuel |
Offloading, disposal, tank cleaning and delay can be expensive. | Retest results, port rules, disposal quote, fault analysis. | Charterer-paid debunkering unless owner fault caused the issue. |
| Redelivery Remaining biofuel value |
Owner may inherit expensive or aging fuel with uncertain next-use value. | ROB statement, fuel age, BDN, LCV, FuelEU documents. | Inserted redelivery price or formula. |
| FuelEU value Compliance and sustainability benefit |
Benefit may be lost if sustainability and energy documents are weak. | PoS or PoC, BDN, energy content, GHG intensity, verifier-ready file. | Allocate benefit and failed-claim risk in writing. |
Commercial Reality
The biofuel premium is not automatically bad. It can buy regulatory value, customer value and emissions progress. The problem starts when the charter party gives one party the fuel benefit while leaving the other party with tank, warranty, testing, storage or redelivery risk.
Negotiation path before accepting biofuel supply
Owners should not wait until the bunker stem is ordered. The practical review should happen before the clause is incorporated.
Documents owners should require with every biofuel stem
The fuel is only as strong as the evidence file behind it. These records should be requested before the owner accepts operational or regulatory risk.
- Fuel specification including grade, blend ratio, bio component, reference standards and supplier declaration.
- Bunker Delivery Note with quantity, density, LCV where required, date of delivery, ship name and IMO number.
- Component evidence showing whether the bio component is FAME, HVO or another accepted fuel type.
- Sampling record with retained samples, seal numbers, sampling location, sample hierarchy and laboratory instructions.
- Compatibility evidence including any compatibility test with ROB or known residue risk from prior fuels.
- Tank-readiness record showing tank allocation, segregation plan, cleaning status, sludge handling and crew instructions.
- Supplier LCV statement plus independent testing right where the number affects performance warranties.
- Sustainability documentation such as Proof of Sustainability, Proof of Compliance or database evidence where relevant.
- FuelEU reporting details including GHG intensity, energy content and verifier-ready evidence if compliance value is claimed.
- Redelivery plan covering remaining quantities, age of fuel, redelivery price, testing rights and debunkering procedure.
Final read for owners and charterers
BIMCO’s 2026 clause is useful because it brings structure to a fast-moving fuel issue. But it is not a substitute for pricing discipline. Owners should price the biofuel premium, tank preparation, stability risk, sampling evidence, incompatibility exposure, LCV adjustment, warranty language, debunkering cost, redelivery valuation and FuelEU value before accepting the clause. Charterers should do the same if they want the emissions benefit without creating a claims fight. The cleanest deals will be the ones where the fuel, documents, timing and economic benefit are all matched before the vessel starts burning biofuel.
