BIMCO has adopted a new contractual framework aimed at encouraging investment in energy-saving retrofits by helping shipowners and charterers agree on how to share the costs and benefits of upgrading vessels under time charter agreements.

The BIMCO Energy Saving Device Retrofit Addendum 2026, approved by the shipping association's Documentary Committee and announced on October 8, seeks to address a longstanding commercial obstacle to improving the energy efficiency of existing ships.

Under traditional time charter arrangements, shipowners typically bear the cost of installing energy-saving equipment, while charterers may receive much of the financial benefit through lower fuel consumption during the charter period.

This imbalance can discourage owners from investing in technologies that could otherwise deliver significant fuel savings and emissions reductions.

The new addendum provides a flexible contractual framework allowing owners and charterers to negotiate how retrofit costs, time-related implications and resulting benefits should be allocated.

Rather than prescribing a fixed cost-sharing or benefit-sharing formula, it enables the parties to agree on arrangements tailored to individual retrofit projects and charter agreements.

The addendum is technology-neutral, meaning it can be applied to a wide range of existing and emerging energy-saving technologies without favouring any particular solution.

It also takes account of the evolving regulatory environment, providing a framework capable of accommodating both existing and future environmental schemes.

The move comes as shipping companies face growing pressure to improve fuel efficiency, reduce greenhouse gas emissions and comply with increasingly stringent environmental requirements.

While retrofitting existing vessels is widely seen as an important part of the industry's decarbonisation efforts, uncertainty over who should finance such upgrades and who should capture the resulting savings has remained a barrier to investment.

By offering a clearer contractual basis for allocating costs and benefits, BIMCO hopes to make retrofit projects more commercially viable and encourage wider adoption of energy-saving technologies across the existing fleet.

The addendum will be made available through BIMCO's SmartCon contract-editing platform, with accompanying explanatory notes to be published in the members' section of its website. BIMCO said links to the documents would be shared once they become available.