The inclusion of shipping in the EU ETS from 1 January 2024 has brought into focus its practical and contractual implications. In response to the need to find a contractual solution, BIMCO has released a suite of three voyage charter party clauses and a clause for BIMCO’s ship management contract.These clauses add to the already published BIMCO Emission Trading Scheme Allowances Clause for Time Charter Parties 2022. The latest clauses from BIMCO have been drafted to address emission trading systems (ETS), including the EU ETS, and the allocation of cost and responsibility in a voyage charter context and a ship management context respectively.The BIMCO Clauses1. ETS – SHIPMAN Emission Trading Scheme Allowances Clause 2023Purpose of the clauseThis clause is applicable to ship management contracts and is designed to allocate the cost and responsibility for obtaining, transferring and surrendering emission allowances for ETS between an owner and a ship manager. Published as a standalone clause so it can be used with the BIMCO SHIPMAN 2009 contract, it will be incorporated into the updated BIMCO SHIPMAN contract due for publication in 2024.The clause caters for two situations: (i) that the owners are the party responsible for compliance under and ETS or, alternatively, (ii) that the managers are the responsible entity for compliance under the ETS.Managers as the Responsible Entity(i) Position under the EU ETSWhere the parties choose that the managers are to be the responsible entity for compliance with the EU ETS, Regulation (EU) 2023/2599 requires that a signed document, which clearly indicates that the managers have been mandated by the ship owners to be responsible for compliance with the EU ETS, is to be provided to the relevant administering authority. In circumstances where such a document cannot be provided, then the ship owner will be considered as the responsible entity for EU ETS obligations. It is, therefore, important that any ship owner who chooses to pass on the responsibility for compliance with the EU ETS to the ship manager ensures that an express mandate has been given in accordance with Regulation (EU) 2023/2599. Notably, BIMCO provides a health warning at the start of the clause to highlight this issue in respect of the EU ETS and its implications to the clause.(ii) Transfer of allowances from owners to managersWhere the ship manager has responsibility for compliance, subclause (b)(iii) provides that the owners are to transfer emission allowances based on the ship manager’s written estimate for the ensuing month, and there is a running reconciliation of allowances for previous months and an adjustment for any previous shortfall or excess.It is left to the parties to insert the timescale within which owners are to transfer the emission allowances. When agreeing this timescale, consideration should be given to any timescale agreed between owners and their charterers pursuant to an ETS clause in the charter party.BIMCO’s explanatory notes to the clause state that where the BIMCO Emission Trading Scheme Allowances Clause for Time Charter Parties 2022 has been incorporated into the charter party, then the time for transfer of allowances in subclause (b)(iii) of the ETS – SHIPMAN Emission Trading Scheme Allowances Clause 2023 would need to be at least 45 days after receipt of the managers’ written request, so that the two clauses are aligned. Should the ETS clauses within a ship management contract and a charter party not be aligned, then the owners may potentially be required to transfer the allowances to the ship manager before receiving the same allowances from their charterers. Owners should be mindful of this when agreeing ETS clauses both up and down the charter party chain to limit their exposure, taking into consideration any possible time extensions permissible under the charter party. Conversely, ship managers may be looking to agree a shorter time frame to limit their exposure.(iii) Financial securityAs an