BIMCO’s retrofit deal unlocks $2.4tn energy shift for shipping
BIMCO adopts 2026 addendum to split retrofit costs and fuel savings between owners and charterers.
The shipping industry is accelerating efforts to cut emissions and improve fuel efficiency amid stricter regulations and rising operational costs. However, investments in energy-saving retrofits have long been hindered by a fundamental mismatch: shipowners bear the upfront costs of installing new technologies, while charterers reap the benefits through lower fuel consumption during the charter period. This misalignment has discouraged both parties from pursuing projects that could deliver substantial environmental and financial gains.
To address this challenge, BIMCO has introduced the Energy Saving Device Retrofit Addendum 2026, a flexible contractual tool designed to facilitate retrofit projects during time charters. Unlike traditional agreements that impose rigid terms, the addendum allows owners and charterers to negotiate how costs, time requirements, and fuel-saving benefits are shared for each specific project.
BIMCO’s new framework bridges the gap: retrofit addendum
Stinne Taiger Ivø, BIMCO’s Deputy Secretary General and Director of Contractual Affairs, described the addendum as a solution to a “long-standing commercial challenge.” She noted that while energy-saving technologies have advanced, their adoption has been slowed by the lack of a clear mechanism to align the interests of owners and charterers. The new framework removes this barrier by enabling tailored agreements that reflect the unique dynamics of each retrofit.
The addendum is also future-proof. As environmental regulations evolve, it provides a structure to incorporate new compliance requirements, ensuring that retrofit projects remain viable under changing industry standards. Its technology-neutral design accommodates a wide range of energy-saving solutions, from existing devices to innovations yet to emerge.
Nicholas Fell, Chairperson of BIMCO’s Documentary Committee, emphasised the broader significance of the tool. “The shipping industry is under increasing pressure to cut emissions and improve energy efficiency,” he said. “Our objective has been to create a practical tool that can help unlock investments in retrofit solutions and support the industry’s decarbonisation efforts.”
A catalyst for industry-wide decarbonisation
The addendum was developed with input from a diverse subcommittee, including shipowners, charterers, and Protection & Indemnity insurers. This collaborative approach ensures the framework balances the needs of all stakeholders, addressing the commercial, operational, and regulatory complexities of retrofit projects.
For shipowners, the addendum provides a way to recoup investments in energy-saving technologies. For charterers, it offers access to more efficient vessels without bearing the full financial burden. By aligning incentives, the framework is expected to accelerate the adoption of retrofits, helping the industry meet its decarbonisation targets while reducing operational costs. With shipping responsible for nearly 3% of global greenhouse gas emissions, the stakes are high—and the potential impact of this tool could be transformative.
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