Coming soon to the UK Supreme Court, and not coming.

UKSC 2022/0009 Herculito Maritime Ltd and others (Respondents) v Gunvor International BV and others (Appellants) “The Polar”      

What is the proper interpretation of a charter agreement and bills of landing (sic) for a vessel, in respect of losses arising out the seizure of the vessel by pirates.

The Court of Appeal decision in December 2021 is noted here.

UKSC 2022/0064       R (on the application of Finch on behalf of the Weald Action Group) (Appellant) v Surrey County Council and others (Respondents)    

Under Directive 2011/92 EU of the European Parliament and of the Council and the Town and Country Planning (Environmental Impact Assessment) Regulations 2017, was it unlawful for the Council not to require the environmental impact assessment for a project of crude oil extraction for commercial purposes to include an assessment of the impacts of downstream greenhouse gas emissions resulting from the eventual use of the refined products of the extracted oil?

Hearing on 21 June 2023

The case raises similar issues on scope 3 emissions to that in Greenpeace Ltd v (1) Secretary of State for Business, Energy and Industrial Strategy and (2) the Oil and Gas Authority; and Uplift v (1) SSBEIS and (2) the OGA (North Sea oil and gas licensing)

On 26 April 2023 permission was granted to proceed with a Judicial Review of the Government’s decision to launch a new licensing oil and gas round, without taking into account the environmental effects of consuming the oil and gas to be extracted. In the new licensing round fossil fuel companies have submitted submitting more than 100 licences to explore for new oil and gas.

And not coming,

The hearing was fixed for 19/20 June but it was announced earlier this week that the case has now settled.

UKSC 2021/0231       Priminds Shipping (HK) Co Ltd (Respondent) v K Line PTE Ltd (Appellant) The Eternal Bliss    

Whether the Charterers are liable to compensate or indemnify the Owners for the cost of settling the cargo claim by way of (a) damages for the Charterers’ breach of contract in not completing discharge within the permitted laytime; and/or (b) an indemnity in respect of the consequences of complying with the Charterers’ orders to load, carry and discharge the cargo.

The answer given by the Court of Appeal was ‘no’. This is now definitive.

Workshop: The Protection of Vulnerable People at Sea (17-18 May, Swansea University)

The Institute of International Shipping and Trade Law is organizing a one-and-a-half-day in-person workshop on the important and topical theme of ‘The Protection of Vulnerable People at Sea’ (17-18 May, Swansea University).

Confirmed panellists are:

  • Dr Zoumpoulia Amaxilati (ISTL)
  • Professor Richard Barnes (University of Lincoln & University of Tromsø)
  • Professor Richard Collins (Queen’s University Belfast)
  • Professor Edwin Egede (Cardiff University)
  • Professor Steven Haines (University of Greenwich)
  • Neil Henderson (Gard AS)
  • Dr Richard L. Kilpatrick, Jr. (College of Charleston)
  • Andrea Longo (One Ocean Hub)
  • Professor Irini Papanicolopulu (SOAS University of London)
  • Dr Aphrodite Papachristodoulou (University of Galway)
  • Francesca Romana Partipilo (Sant’Anna School of Advanced Studies)
  • Matilde Rocca (University of Padova)
  • Dr Mercedes Rosello (Leeds Beckett University)
  • Dr Jessica Schechinger (University of Glasgow)
  • Chris Whomersley (Former Deputy Legal Adviser, Foreign, Commonwealth and Development Office)
  • Sir Michael Wood KC, Barrister (Twenty Essex Chambers, London)

The full programme of the workshop can be found here.

The workshop is open to all and there is no fee to attend. Participation can be registered via the following link:

The ‘Ever Given’ salvage claim. Contract, or Salvage under 1989 Convention and/or common law?

Two years ago the ‘Ever Given’ threatened to become the ‘Ever Stuck’ in the Suez Canal. By the time ‘Ever Given’ refloated, SMIT had a team on board (with onshore support from Holland), and two chartered tugs, ALP Guard and Carlo Magno, contributing to the salvage effort. Whether SMIT concluded a contract with the owners for their services was the preliminary issue that came before Andrew Baker J in Smit Salvage B.V v Luster Maritime S.A.. [2023] EWHC 697 (Admlty). If the answer was ‘yes’, no salvage claim would lie, only a claim under the contract. If the answer was ‘no’ Smit would be able to claim salvage under the terms of the International Convention on Salvage 1989 and/or at common law.

The owners’ case was that the following exchange of emails on 26 March 2021 resulted in the conclusion of a contract in that consensus ad idem as to all essential terms was created, with a mutual intention, notwithstanding a mutual intention to agree (and sign) more detailed terms, by the following exchange of emails that morning (UTC):

Email (i)

At 11:35 UTC, from Captain Saumitr Sen on behalf of WK Webster & Co Ltd (‘WKW’), a claims manager acting as agent appointed by owners, to Mr Richard Janssen (Managing Director of SMIT) and Mr Jody Sheilds (also of SMIT), copied to various others, stating:

“We refer to our telephone conversation subsequent to my previous email and my further conversation with Japan. As agreed over phone, I am please to confirm as below on behalf of Owners of Ever Given.

Owners agree to the following :

The tugs, dredgers, equipment engaged by SCA and their subsequent salvage claim are separate to the Smit’s offer of assistance.

a) SMIT personnel and equipment to be paid on Scopic 2020 rates

b) Any hired personnel and equipment, out of pocket expenses of SMIT to be paid on scopic 2020 rate + 15% uplift

c) Refloatation Bonus of 35% of Gross invoice value irrespective of the type of assistance rendered.

ci) Refloatation bonus not to be calculated on amounts chargeable for quarantine or isolation waiting period.

cii) Refloatation bonus to SMIT will be applicable if refloatation attempt by SCA on 26 March 2021 is unsuccessful.

We look forward to your confirmation. We can then start ironing out the wreck hire draft agreement so that the same can be signed at the earliest.”

Email (ii)

At 11:40 UTC, from Mr Janssen to Capt Sen, cc. Mr Sheilds and the others, in

reply, stating:

“Thank you Captain and confirmed which is very much appreciated. I shall inform our teams accordingly and we shall follow up with the drafting of the contract upon receipt of your/your client’s feedback to our draft as sent last night.”

Andrew Baker J found that there would be a contract between the parties if and only if they so communicated with each other as to make it appear, judged objectively, that they had reached agreement upon terms sufficient in law to constitute a contract and that they intended to be bound by those terms whether or not they agreed any more detailed set of contract terms. So long as the parties have agreed enough to be capable of constituting a contract, there was no rule of law that if terms of economic or other significance have not been finalised, the parties cannot have intended to be bound

The contract formation issue was whether there was an intention to be bound. The parties did not state in terms whether the intention was to be bound there and then, or only upon agreeing (if they did) a detailed set of contract terms, or only upon signing a written contract having first agreed such terms. Therefore, contractual intent fell to be determined by considering what was reasonably conveyed by the parties to each other about that, by the way they expressed themselves and by their conduct visible to the other, considered as a whole, at least up to and including the moment at which it is alleged that a contract was concluded. An intention to be bound cannot be found where it is not the only reasonable connotation of the parties’ exchanges and conduct, taken as a whole. Exchanges and conduct not consistent only with an intention to be bound are ambiguous, and a contract can only be found in and constructed from unambiguous communication

Andrew Baker J rejected the argument put forward by Mr Jacobs KC, based on previous salvage decisions in The Athena [2023] EWHC 697 (Admlty) and The Kurnia Dewi  [2023] EWHC 697 (Admlty) “that it is common practice in the salvage industry for main terms (remuneration/type of contract) to be agreed and then for a broader contract on WRECKHIRE or other terms to be agreed. The latter contract supersedes the previous contract, which is entered into at a time of urgency and when there is no time for a full agreement to be reached.” They were simply decisions on their own facts, applying to those facts the basic principle stated as to whether there had been an intention to be bound.

The email exchange on 26 March 2021 read objectively and in context, showed that Capt Sen and Mr Janssen did not purport to conclude a contract between SMIT, or any of the other claimants, and the defendants or either of them. The exchange showed an agreement reached on the remuneration terms for a contract that was being negotiated. But the parties made it clear to each other that they were still negotiating, indeed the detailed work of negotiating the contract terms by which they would be bound. They did not communicate to each other an intention to be bound in the absence of completing that work of negotiating and agreeing a detailed set of contract terms. That further work was not completed, as a counter-proposal on detailed terms later sent by Capt Sen put the parties some considerable distance apart, and that gap was never closed.

Therefore, no contract was concluded between SMIT and the owners.

The next step in the reform of the Arbitration Act 1996

Recently, the Law Commission for England and Wales published the Second Consultation Paper on the Review of the Arbitration Act 1996 containing provisional law reform proposals to ensure that the arbitration law remains state of the art. Back in 2021, the Ministry of Justice asked the Law Commission to undertake a review of the Arbitration Act 1996. Following this, the Commission published its first public consultation paper unfolding provisional law reform proposals. The consultation period was open by December 2022. See the previous post about the first consultation paper here: Law Commission to review the Arbitration Act 1996

The consultation questions in the previous paper were around the shortlisted aspects of the arbitration, including confidentiality, independence of arbitrators and disclosure, discrimination, immunity of arbitrators, summary disposal of issues that lack merit, interim measures ordered by the court in support of arbitral proceedings (section 44 of the Act), jurisdictional challenges against arbitral awards (section 67), and appeals on a point of law (section 69). In addition, the Commission encouraged consultees to suggest and comment on any other topics which were not covered but might need reviewing.

It is worth reiterating the main points of my response to the first consultation paper:

  • As of the status quo based on the existing legislation and authorities, relitigation and reconsideration by the court following the challenges brought under Section 67 not only double the waste of time and expenses by the repetitive proceedings and potential parallel or inconsistent judgments but also go against the whole idea of arbitration and the fundamental principle “Kompetenz-kompetenz”.
  • The courts’ powers to grant interim injunctions derive from the two fundamental legal frameworks – Arbitration Act 1996, Section 44 and Senior Courts Act 1981, Section 37. The revision of the existing legal frameworks to reflect the interrelationship and boundaries of the instruments with regard to the court’s powers to make orders in support of arbitral proceedings would be in line with the objectives and general principles of the Arbitration Act 1996 to improve the law relating to arbitration, in general. Indeed, the revision would bring clarity about the application scope of the Act (see the Introductory Act to the Arbitration Act 1996) and contribute to the fair resolution of disputes by an impartial tribunal without unnecessary delay or expense.

Based on the suggestions made by the consultees involved in the first round of the reform project, in its second consultation paper, the Commission has made new proposals about the proper law of the arbitration agreement. Furthermore, the Commission considers the following two issues as the most controversial ones among the others and seeks the views of consultees on the revised proposals: (1) challenges to awards under section 67 on the basis that the tribunal lacked jurisdiction; and (2) discrimination in arbitral appointments.

The second consultation paper will be open by 23:59 hours on 22 May 2023. The responses of consultees to this second consultation paper will be taken along with responses to the first consultation to inform the final report and recommendations. All the details of the project and relevant consultation documents are available here: Review of the Arbitration Act 1996 – Law Commission

International Shipping and the EU Emissions Trading Scheme. Evasion and ‘pass-through’.

On 30 December 2022 we recorded the provisional agreement reached by the Council and the Parliament on 18 December 2022 regarding amendments to the Commission’s proposed Directive amending the  2003 ETS Directive. The full text of the agreement was released on 8 February 2023. Two additional amendments are notable.

First, as regards possible evasion of the ETS by transhipping containers outside EU countries. Article 3(g) (1) (a) provides.

“The Commission shall by 31 December 2023 by means of implementing acts establish a list of the neighbouring container transhipment ports and update this list before 31 December every two years thereafter.

Those implementing acts shall list neighbouring container transhipment ports where the share of transhipment of containers, measured in twenty-foot equivalent unit, exceeds 65 % of the total container traffic of that port during the most recent twelve-month period for which relevant data are available located outside the Union but less than 300 nautical miles of a port under the jurisdiction of a Member State. For the purpose of this paragraph containers shall be considered as transhipped when they are unloaded from a ship to the port for the sole purpose of loading them on another ship. The list shall not include ports located in a third country that effectively apply measures equivalent to this Directive.”

Article 3 wa defines port of call to exclude various activities including “stops of containerships in a neighbouring container transhipment port listed in the implementing act adopted pursuant to Article 3g(1a).”

Second, Article 3 gaa provides for a mandatory pass-through of ETS costs borne by the shipowner or demise charterer “when the ultimate responsibility for the purchase of the fuel and/or the operation of the ship is assumed by a different entity than the shipping company pursuant to a contractual arrangement.”

Operation of the ship means “determining the cargo carried and/or the route and the speed of the ship” and so clearly encompasses time charterers. Member States are required to “take the necessary measures to ensure that when the ultimate responsibility for the purchase of the fuel and/or the operation of the ship is assumed by a different entity than the shipping company pursuant to a contractual arrangement, the shipping company is entitled to reimbursement from that entity for the costs arising from the surrender of allowances.”

The Preamble states “While such a mechanism of reimbursement could be subject to a contractual arrangement, Member States should, to reduce administrative costs, not be obliged to ensure or control the existence of such contracts but should instead provide, in national law, a statutory entitlement for the shipping company to be reimbursed and the corresponding access to justice to enforce that entitlement.” 

The pass-through provision states that “Member States shall ensure that shipping companies under their responsibility comply with their obligations to surrender allowances, notwithstanding their entitlement to be reimbursed by the commercial operators for the costs arising from the surrender.”

One can foresee interesting situations where a shipowner under a time charter which does not provide for the pass through of such costs, obtains an order from the courts of a Member State that the time charterer should reimburse it for those costs, and the time charterer declines to do so.

The amendments to the 2003 ETS Directive need to be adopted, and then transposed by Member States by the end of 2023 if they are to become operative as of 1 January 2024 as envisaged. Adoption was expected to occur in the first quarter of 2023. We have now entered the second quarter of 2023.

Text agreed new UN High Seas Agreement

Draft agreement under the United Nations Convention on the Law of the Sea on the conservation and sustainable use of marine biological diversity of areas beyond national jurisdiction

The text of the Agreement, which takes the form of a new Implementing Agreement under the United Nations Convention on the Law of the Sea (UNCLOS) to protect and sustainably use the resources of these areas, was agreed on 4 March 2023. The Agreement establishes marine protected areas in the high seas which will help achieve the global goal of protecting 30% of the world’s oceans – set out in the UN’s Global Biodiversity Framework agreed in December 2022 in Montreal at the Convention on Biological Diversity  when countries pledged to protect 30% of ocean, land and coastal areas by 2030. These areas will put limits on how much fishing can take place, the routes of shipping lanes and exploration activities like deep sea mining – when minerals are taken from a sea bed 200m or more below the surface. the treaty will also require assessing the impact of economic activities on high seas biodiversity. Developing countries will be supported in their participationin and implementation of the new treaty by a strong capacity-building and marine technology transfer component, funded from a variety of public and private sources and by an equitable mechanism for sharing the potential benefits of marine genetic resources.

State parties are to apply the Agreement’s new environmental safeguards to activities “within their jurisdiction or control” and will need to ensure that high seas activities falling within their jurisdiction or control comply with the new requirements of (inter alia) environmental impact assessments, area-based management tools and marine protected areas under the Agreement. The Agreement does not define the concept of jurisdiction or control.

The Agreement will enter into force once 60 States have ratified. 

The Seafarers’ Wages Act receives Royal Assent

A few days ago, on 23 March 2023, the Seafarers’ Wages Bill,[1] which was first introduced in the House of Lords in July 2022, received Royal Assent and became law. The Seafarers’ Wages Act 2023, as it is now called, is designed to protect seafarers who work on vessels operating an international service, but have close ties to the UK, from being paid less than the UK national minimum wage (NMW) while they are in UK waters.

To this effect, operators of vessels calling at UK ports on at least 120 occasions during a year are required to produce evidence of paying their crew the equivalent to the UK’s NMW, which, as of April 2023, will be £10.42 for those over the age of 23, £10.18 for 21-22 year-olds and £7.49 for 18-20 year-olds. While the Act specifies that the necessary evidence should be manifested in a NMW equivalence declaration, regulations made by the Secretary of State will specify the period within which, and the manner in which, the equivalence declaration is to be provided, as well as the form of the declaration.

For those operators who fail to provide the equivalence declaration or provide the equivalence declaration but operate their ship inconsistently with the declaration, the Act provides that harbour authorities have an obligation to impose a charge in respect of each occasion when their ship enters the port, as well as to refuse port access if they fail to pay the relevant charges. The amount of a surcharge is to be determined by a tariff of surcharges specified in regulations.

The Act finally creates a series of offences. For example, operators of vessels will be guilty of an offence and liable on summary conviction to a fine if an equivalence declaration is provided but the service is operated inconsistently. Whereas harbour authorities which fail to request an equivalence declaration or fail to comply with their duty to impose a surcharge or to refuse access to their port, will also face that risk.

Although the main provisions of the Act have not come into force yet,[2] any operators who continue to pay their crew at a rate below the UK NMW should start making the necessary arrangements, if they wish to continue using UK ports on a regular basis without any interruptions.

[1] For more details, see our previous post <> .

[2] According to section 20 (3) of the Seafarers’ Wages Act 2023, sections 3 to 15 will come into force on such day as the Secretary of State may by regulations made by statutory instrument appoint.

Unsafe ports and negligent pilots.

London Arbitration 2/23 involved a claim for breach of the safe port warranty in an amended NYPE 1981 form,  time charter trip to China. The vessel grounded while under pilotage in the port of Chaozhou, proceeding to her discharge berth, and suffered damage to her port side hull structure, resulting in water ingress. The owners claimed that, in breach of the charterparty, the port was unsafe and claimed  the cost of repairs and associated damages in an amount of US$1,158,559.59 plus interest and costs.

The parties accepted that the vessel grounded outside the channel in charted shoal water and that the pilot would have known of the location of the charted shoal water. At the time of leaving the load port, the vessel did not have adequate charts onboard to create a proper passage plan for the discharge port. The tribunal found that the plan must have been defective as it could not have been based on the appropriate channel data at the time the vessel departed the loading port.

The master should have made efforts to obtain the appropriate harbour chart, Chinese MSA Chart 81102. It was ordinary good practice to navigate on the largest scale chart available. The pilot could have taken a copy onboard or a photograph of the chart could have been emailed to the vessel. The tribunal found that the master was negligent in failing to obtain a copy of the chart. The master was therefore not aware that the vessel was standing into danger during her final approach to, and manoeuvres within, Chaozhou harbour and, consequently, failed to query the pilot’s actions or attempt any direct action to prevent the vessel grounding. In failing to effectively monitor the pilot’s conduct of the vessel the master was negligent.

The tribunal concluded that the pilot was negligent in failing to manoeuvre the vessel such that she remained in the deep-water channel at all times. The tribunal found that the cause of the grounding was the negligent navigation of the vessel during her inbound passage to her discharge berth. However, the deep-water channel was safe for the vessel at the material time. The limits of the channel were marked on appropriate navigational charts and were known to the pilot.

The test for competence was whether the pilot was affected by a disabling lack of skill or knowledge, deriving from inherent lack of ability, lack of adequate training, lack of particular knowledge, or a disinclination to perform the job properly: The Eurasian Dream [2002] 1 Lloyd’s Rep 719 per Creswell J. The tribunal found the pilot to have been negligent in misjudging the turn into the port and failing to take appropriate action to correct his error. It was not persuaded that there was any evidence that he was affected by any of the deficiencies in the test above. It found him to be competent. A one-off mistake such as this by a competent pilot was not a defect in the set-up of the port: The grounding did not result from the vessel being exposed to dangers that could not be avoided by good navigation and seamanship. The vessel could and should have been manoeuvred within the deep-water channel but was not. Nor was the grounding the result of an abnormal occurrence,

The tribunal also found that the vessel was unseaworthy at the beginning of her voyage because she lacked the appropriate chart to prepare a berth-to-berth passage plan that was compliant with IMO Resolution A893(21). The defect was capable of being rectified by the master obtaining the required harbour chart before the vessel commenced her inbound passage to Chaozhou. However, the master made no effort to obtain the required chart and commenced the inbound passage without any knowledge of the limits of the deep-water channel.

There was no evidence that the owners exercised due diligence to ensure that the vessel had a compliant passage plan before she departed for Chaozhou. However, the grounding was caused by the vessel’s negligent navigation, specifically the pilot’s failure to ensure that the vessel turned at the required rate to remain in the deep-water channel.

The owners’ claim for loss and damage suffered as a result of the grounding failed.

Safe Port Warranty in Charterparties- London Arbitration 2/23

The chartered vessel (a gearless Panamax bulk carrier) ran aground while entering the port of Chaozhou under pilotage. As a result, she suffered damage to hull structure. The owners claimed the cost of repairs and associated damages in the amount of US$ 1,158.559.59 plus interest and costs on the premise that charterer directed the vessel to an unsafe port in breach of a safe port warranty in the charterparty.

The charterers defended the claim arguing that the vessel was unseaworthy as she lacked the proper charts which prevented the master from preparing an effective berth-to-berth passage plan (The CMA CGM Libra [2021] UKSC 51). On that basis, the charterers argued that unseaworthiness was the effective cause of the loss and as the Hague-Visby Rules were incorporated into the charterparty by a Paramount Clause, they were able to rely on breach of Article III Rule (1) of the Rules as a defence of circuity of action to the owners’ claim for breach of the unsafe port warranty, according to the principle in Post Office v. Hampshire [1980] QB 124.

Was the port unsafe?

There is authority pointing to the fact that a systematic error in the infrastructure of a port could potentially make that port unsafe (The Ocean Victory [2017] UKSC 35)- the pilots employed by a port can certainly be considered part of that port’s infrastructure. It was in essence the submission of the owners that the pilot’s failure to deploy the stern tug in “indirect” mode to bring the stern of the Vessel around to port and her head around to starboard meant that he was incompetent. (according to the owners, this failure demonstrated a disabling lack of skill or knowledge amounting to incompetence in line with the test laid down in The Eurasian Dream [2002] 1 Lloyd’s Rep 719). The tribunal disagreed. After a technical evaluation assisted by expert mariners, it was held that the main fault of the pilot in this case was failure to execute the manoeuvre required to enter into a port (that poses some navigational challenges) correctly. This was deemed to be an isolated error on his part. The pilot worked at Chaozhou for 5 years before this incident, continued working as a pilot there for some five years afterwards, and had not been involved in any other incidents. He had demonstrated the ability to control the Vessel and the tugs in other respects during this incident.

It is not beyond the bounds of possibility that a pilot employed by a harbour authority could be regarded as incompetent but the burden that the owners need to discharge in such a case is a considerable one and unless it can be demonstrated that the pilot in question is recently appointed and no adequate training opportunities are offered to him/her by the harbour authority to familiarise himself/herself with particular navigational challenges the relevant port poses, it is likely that any navigational error of the pilot will be judged as one off as was the case here.

Was the vessel unseaworthy?

The finding on the safety of the port was adequate to dispose the owners’ claim but the tribunal also made the following observations regarding the vessel’s seaworthiness. It was found that the vessel did not have the up-to-date Chinese paper chart on board showing the limits of the dredged deepwater channel. On that basis it was held that the passage plan must have been defective as it could not have been based on appropriate channel data at the time the vessel departed the loading port. The tribunal also found that as a result the Master and deck team failed to alert the pilot to his errors and failed to attempt any action to avoid the grounding. Therefore, it was evident that the vessel was unseaworthy. However, it was held that the unseaworthiness was not an effective cause of the grounding. We can only assume that the tribunal after evaluating the expert evidence concluded that pilot’s negligence was the main effective cause of the grounding- put differently but for the pilot’s negligence the vessel could have still entered the port in a safe manner despite the fact that the passage plan, based on incomplete data, was defective. This is obviously a factual finding, and it is hard for us to comment on without having access to the expert evidence that the tribunal had the chance to see.

That said it would have been very interesting to see how the tribunal would have reacted to the point raised by the charterers: i.e. if the port had been deemed unsafe and unseaworthiness was found to be an effective cause of the loss. In that case, would the charterer be able to avoid liability without having the need to demonstrate that the Vessel’s unseaworthiness was a novus actus interveniens which severed the chain of causation between the unsafety of the port and the grounding? Possibly yes, but that is a moot point which needs to be decided on another day.

EU Parliament and Council reach agreement on FuelEU Maritime Regulation

Early on the morning of 23 March the European Parliament and the Council agreed on FuelMaritime EU– a new EU regulation ensuring that the greenhouse gas intensity of fuels used by the shipping sector will gradually decrease over time, by 2% in 2025 to as much as 80% by 2050. This measure increases the maritime transport sector’s contribution to reaching the EU-wide target of reducing net greenhouse gas emissions by at least 55% by 2030.

FuelEU Maritime will set maximum limits on the yearly greenhouse gas intensity of the energy used by a ship, with targets will becoming increasingly ambitious over time to stimulate and reflect the expected developments in technology and the increased production of renewable and low-carbon fuels. The targets cover not only CO2, but also methane and nitrous oxide emissions over the full lifecycle of the fuels.

Additionally there is an additional zero-emission requirement at berth, mandating the use of on-shore power supply (OPS) or alternative zero-emission technologies in ports by passenger ships and containerships, with a view to mitigating air pollution emissions in ports.

The Regulation takes a goal-based and technology-neutral approach, allowing for innovation and the development of new fuel technologies to meet future needs, and offering operators the freedom to decide which to use based on ship-specific or operation-specific profiles. The Regulation also provides for a voluntary pooling mechanism under which ships will be allowed to pool their compliance balance with one or more other ships, thereby making it the pool as a whole that has to meet the greenhouse gas intensity limits on average.

The political agreement must now be formally adopted, and once this is completed by the European Parliament and the Council, the new rules will be published in the Official Journal of the European Union and enter into force 20 days after publication.