BIMCO (the International Shipping Association) has recently approved an addendum called the Energy Saving Device Retrofit Addendum 2026. This new contractual framework is designed to facilitate the installation of energy-saving devices during the time charter of ships. This initiative is aimed at improving fuel efficiency and ship performance to meet carbon reduction requirements and increasing operational cost constraints.
Facilitating Retrofit Investments
This addendum allows shipowners and charterers to flexibly agree on how to share costs, timing, and the fuel savings benefits associated with retrofit projects. Stinne Taiger Ivø, Deputy Secretary General and Director of Contractual Affairs at BIMCO, has stated that this addendum addresses long-standing commercial challenges. Energy-saving technologies have become increasingly complex, but investment in retrofit projects has become complicated due to misalignment of commercial interests between owners and charterers.
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Increased Pressure to Reduce Emissions
When shipowners cover the costs of purchasing and installing equipment, some or all operational benefits typically accrue to charterers during the lease period. As a result, the incentive for both parties to implement retrofit projects has diminished, even if these projects could yield significant fuel savings and environmental benefits. This addendum addresses this gap and allows parties to customize how costs and benefits are shared for each project.
Nicholas Fell, Chair of the BIMCO Documentation Committee, has emphasized that the shipping industry is under increasing pressure to reduce emissions and improve energy efficiency. Our goal is to create a practical tool that can assist in investing in retrofit solutions and support the industry's efforts to reduce carbon. This addendum is structured to respond to the needs of current and future energy-saving technologies while providing a framework for compliance with current and future environmental regulations.
