Introduction
CO₂ shipping is emerging as a critical component of the carbon capture, utilisation and storage (CCUS) value chain, and contractual frameworks are now evolving to support this transition.
The UK Club had the opportunity to contribute to the BIMCO drafting process for CO2TIME 2026, working alongside key market participants and technical specialists from the gas shipping sector. The result is a timely contractual framework for a trade that is moving rapidly from concept to commercial reality: the maritime transport of liquefied carbon dioxide as part of CCUS projects.
Adopted by BIMCO in April 2026, CO2TIME 2026 is the first standard time charter party designed specifically for the carriage of liquefied CO₂. It reflects the increasingly important role shipping is expected to play in connecting capture sites with storage hubs and wider CCUS infrastructure.
A practical and familiar framework
One of the key strengths of CO2TIME 2026 is that it does not seek to reinvent chartering practice. Instead, it builds on established gas shipping concepts, while adapting them to the technical, operational and regulatory realities of CO₂ carriage.
This balance between familiarity and innovation is significant. It provides owners, charterers, financiers and project developers with a recognisable contractual structure, reflecting the contribution of market participants and specialists involved in BIMCO’s drafting process, while helping to reduce the uncertainty that has characterised many early-stage CO₂ transport projects.
Meeting the needs of a growing market
The timing of CO2TIME 2026 is notable. Across Europe and parts of Asia, CCUS projects are advancing rapidly, creating demand for reliable transport solutions for captured emissions.
As these projects scale, counterparties require charter wording that addresses not only standard operational issues, but also the distinct risks associated with liquefied CO₂, including those arising from cargo behaviour, emissions exposure, terminal interface risks and evolving public law obligations.
In this context, CO2TIME 2026 represents both a practical contractual development and a clear signal that CO₂ shipping is becoming an established trade.
Key contractual features
The charter party adopts a pragmatic approach to risk allocation. Liabilities and costs are generally assigned by reference to the party controlling the relevant operational decision – an important principle in a trade where vessel operations, terminal requirements and cargo characteristics can create unusual exposures.
Although designed primarily for liquefied CO₂, the form also has sufficient flexibility to be used in certain other liquefied gas trades, such as LPG, and can therefore be regarded as both a specialist contract and a commercially adaptable one.
- Clause 20 (In-transit Loss)
Clause 20 recognises that small losses may be inherent in the physical characteristics of the cargo. It introduces a practical threshold below which claims should not arise. This reflects the operational realities of carriage, particularly in early-stage CO₂ projects where documentation practices may differ from traditional bill of lading regimes.
- Clause 21 (Vapour Return)
Clause 21 addresses terminal-driven requirements that may expose vessels to contamination risks and strict liability regimes beyond the owner’s control. By making vapour return conditional on approval of shore quality documentation, and by requiring an agreed indemnity from charterers, the clause seeks to rebalance risk in a commercially realistic way.
- Clause 33 (Cargo Emissions Clause)
Clause 33 is likely to prove one of the most significant provisions in practice. It distinguishes between emissions arising from the cargo itself and those generated by the vessel’s propulsion and operation.
Responsibility for cargo-related emissions is allocated to charterers, save where emissions result from an owner’s breach. This distinction is important given that existing regulatory regimes, including MRV and EU ETS frameworks, were developed primarily with fuel combustion and vessel operations in mind, rather than cargo emissions within a CCS chain. In this context, CO2TIME 2026 provides valuable contractual clarity in an area where the public law framework remains unsettled.
The inclusion of forward-looking provisions, including references to pollution security and the HNS Convention, highlights that the form has been drafted with future regulatory developments in mind.
Regulatory considerations: EU ETS and CCS
From a regulatory perspective, a key issue remains the structural misalignment between the CCS value chain and the current EU ETS liability model. Under the present framework, emitters benefit only from permanently stored CO₂, while shipowners may face liability for CO₂ released during transport, giving rise to risks of double counting and double compliance. This is compounded by the absence of a fully harmonised mechanism linking capture, transport and storage within a single accounting system, as well as limited guidance on the treatment of vessels carrying CO₂ for geological storage under the ETS regime.
Insurance considerations
From an insurance perspective, these uncertainties are equally as important as the charter wording itself. Existing P&I structures and pooling arrangements were not originally designed to address ETS-related liabilities, cargo leakage emissions or CCS transport chains. As a result, a number of important questions remain, including the availability of cover for fines and penalties, the treatment of emissions-related liabilities, and how contractual risk allocations will interact with exposures arising under bills of lading, terminal conditions and evolving regulatory frameworks. These issues underline the importance of ensuring that contractual innovation is aligned with appropriate insurance solutions.
Conclusion
CO2TIME 2026 represents a timely and important development for the shipping industry. It reflects the growing importance of liquefied CO₂ carriage within the CCUS value chain and provides market participants with a standard form that combines established gas shipping practices with solutions tailored to the specific risks of this emerging trade. By offering a more balanced alternative to certain charterer-favourable gas forms, and by addressing key issues such as cargo loss, vapour return, emissions allocation and pollution security, the form is likely to support market confidence as CO₂ shipping moves towards wider commercial deployment.
Looking ahead, CO2TIME 2026 may also serve as a foundation for further contractual, regulatory and insurance developments as the CCUS sector continues to scale globally.
For a broader discussion of carbon capture in the maritime context, including the operational, regulatory and liability risks associated with liquefied CO₂ transport, see our related article, Carbon Capture and the Risk of LCO₂ Shipping.