SCC Brochure V09

Aligning global shipping
with society’s goals

Version 2.2
August 2022
“Sea Cargo Charter” is a reference to the arrangements set out in the Membership Agreement and the Governance
Rules of the Sea Cargo Charter Association, a non-profit association registered in Denmark, which are available
on www.seacargocharter.org and any interested party is encouraged to consult. This document is intended only as
guidance and does not interpret, replace or amend the Membership Agreement or the Governance Rules.
Sea Cargo Charter

Amaliegade 33 B, 3rd floor
1256 Copenhagen K
Denmark
www.seacargocharter.org
[email protected]
© Sea Cargo Charter

Sea Cargo Charter
The Sea Cargo Charter

As Signatories and members of the Sea Cargo Charter drafting group, we are proud
to announce our commitment to addressing the environmental impacts of global
seaborne trade.
Inspired by the launch of the Poseidon Principles in June 2019, the Sea Cargo Charter
was developed in recognition of our role as charterers in promoting responsible
environmental stewardship throughout the maritime value chain. We believe that
industry-wide change is possible when we all take responsibility for contributing to
meeting the greater goals of the society we serve.
The Sea Cargo Charter is aligned with the Poseidon Principles and is consistent
with the policies and ambitions of the International Maritime Organization (IMO),
including its ambition for greenhouse gas (GHG) emissions to peak as soon as
possible and to reduce shipping’s total annual GHG emissions by at least 50% by
2050 compared to 2008. As such, it sets a standard for reporting emissions, thus
enhancing transparency and creating a global baseline to support and work towards
the greater goals for our society and the goal to align our maritime activities to be
environmentally responsible.
The Sea Cargo Charter is applicable to charterers with interest in the cargo on board;
those who simply charter out the vessels they charter in; as well as the disponent
owners and all charterers in a charterparty chain. They apply globally, to all
chartering activities where a vessel or vessels fall under the purview of the IMO.
Currently, climate alignment is the only factor considered by the Sea Cargo
Charter. However, we recognize that they are intended to evolve over time and
agree to contribute to a review process to ensure that the Charter is practical and
effective, aligned with the goals set by the IMO, and that further adverse impacts
are identified for inclusion in due course. While the Sea Cargo Charter establishes
a global baseline, we recognize that some Signatories may wish to go beyond this
individually, and nothing in the Charter prevents that.
As Signatories, we commit to implementing the Sea Cargo Charter in our internal
policies, procedures, and standards, and to work in partnership with our business
partners on an ongoing basis to implement the Charter. The Sea Cargo Charter will
not only serve our institutions to improve decision making at a strategic level, but will
also shape a better future for the shipping industry and our society.
We believe now is the time to take this initiative, and we invite you to join us.
7 October 2020
Jan Dieleman Richard Head Peter Lye

President, Head of Health, Safety, Head of Shipping,
Cargill Ocean Transportation Environment and Communities, Anglo American
Trafigura
Jan Rindbo Lance Nunez Luc Gillet

Chief Executive Officer, Marine and Terminal Senior Vice President Shipping,
Norden Logistics Director, Total Trading & Shipping
Dow Chemical
1
Sea Cargo Charter
Preamble
The maritime sector has provided efficient economic services that have played a
key role in enabling the growth of global trade and global economic development.
However, this has not been without some adverse consequences unique to the
maritime sector. The continued success of the maritime sector is intrinsically linked
to the well-being and prosperity of the society we serve. Therefore, all industry
participants must play a role in addressing adverse impacts. Financial institutions
already took the first step in June 2019 by launching the Poseidon Principles, which
we as charterers support.
As charterers, we also recognize that our role in the industry affords us opportunities
to promote responsible environmental stewardship throughout the maritime
value chain. Thus, we have established the Sea Cargo Charter, which serves as a
framework for creating common, global baselines that are consistent with, and
supportive of, broader societal goals. This will enable us to better align our chartering
activities with responsible management of environmental impacts.
The Sea Cargo Charter is consistent with the policies and ambitions of the IMO,
including its ambition for GHG emissions to peak as soon as possible and to reduce
the total annual GHG emissions by at least 50% by 2050 compared to 2008. They
are aligned with the Poseidon Principles and are also intended to support other
initiatives, such as the United Nations’ Sustainable Development Goals, the Global
Logistics Emissions Council (GLEC) Framework, the Carbon Disclosure Project (CDP),
Energy Transitions Commission, and the many others that are developing to address
adverse impacts.
As Signatories, we commit to implementing the Sea Cargo Charter in our internal

policies, procedures, and standards. We will work in partnership with our business
partners on an ongoing basis to implement the Sea Cargo Charter. We welcome the
establishment of global baselines through the Sea Cargo Charter and recognize that
some Signatories may choose to go beyond them. This offers significant benefits to
us as Signatories, to the global maritime industry, and to society as a whole.
The Sea Cargo Charter recognizes that there are different types of charterers and
wants to facilitate participation by giving Signatories reporting options. The Sea
Cargo Charter will always strive to achieve the best balance between wide adoption,
transparency as to options chosen, and confidentiality as to the reporting voyages.
We recognize that the Sea Cargo Charter is intended to evolve over time and agree to
contribute to a review process when we, as Signatories, decide to undertake it. This
process will ensure that the Sea Cargo Charter is practical and effective, that it is
linked to and supports the goals set by the IMO, and that further adverse impacts are
identified for inclusion.
2
Sea Cargo Charter
Scope
All charterers are eligible to join the Sea Cargo Charter: those with interest in the
cargo on board; those who simply charter out the vessels they charter in; disponent
owners; all charterers in a charterparty chain; companies involved in pools.
The Sea Cargo Charter must be applied by Signatories in bulk chartering activities
that are:
1. on time or voyage charters, including contracts of affreightment and parceling,

with a mechanism to allocate emissions from ballast voyages,
2. for voyages carried out by dry bulk carriers, chemical tankers, oil (crude and
product) tankers and liquefied gas carriers,
3. and where a vessel or vessels are engaged in international trade (excluding
inland waterway trade)1.
In recognition of the diversity of a charterer’s role, the Sea Cargo Charter adopts a
twin approach: firstly, flexibility as to the Signatories’ choice of reporting segments,
so as to encourage the widest adoption possible; secondly, certain minimum
reporting requirements so as to maximize impact.
1 Until 31 December 2021, vessels under 5,000 gross tonnage are excluded. Starting from 1
January 2022, vessels under 5,000 GT are also included.
3
Sea Cargo Charter
As to choice of reporting segments:

• SEGMENT 1 – Charterparties where the Signatory is the only time charterer
and there is no charterparty chain or, if there is a charterparty chain, the
Signatory is the final time charterer.
• SEGMENT 2 – Charterparties where the Signatory is the voyage charterer.
• SEGMENT 3 – Charterparties where the Signatory is an intermediate time

charterer in a charterparty chain, or the bareboat charterer.
• SEGMENT 4 – Owned vessels: if, in addition to being a charterer on certain

transactions, Signatories or companies within the same group also own
vessels, they can also choose to include voyage of their owned vessels in
their reporting.
As to minimum reporting requirements:

• Segments 1 and 2 are mandatory. All Signatories must report their
activities that fall within those segments. As to Segment 1, the percentage
of non-reporting voyages is expected to be zero, or close to zero. As to
Segment 2, the percentage of non-reporting voyages is expected to be
higher, as the data need to be sourced from business partners. As adoption
of the Sea Cargo Charter spreads within the industry, the percentage of
non-reporting voyages is expected to decrease.
• Segment 3 is optional. If a Signatory chooses to report within this segment,

the percentage of non-reporting voyages is expected to be similar to those
in Segment 2 because the Signatory would similarly rely on data sourced
from business partners.
• Segment 4 is optional and is only open to Signatories who are also

reporting in Segments 1-3. The percentage of non-reporting voyages within
Segment 4 is expected to be low, especially as owners would need to
collect such data for other mandatory purposes.
The Sea Cargo Charter does not extend to parties involved in a contract for the
purchase and sale of commodities, if such parties do not occupy the position of a
charterer (e.g., FOB sellers or CIF/CFR/DES/DAP buyers). However, the Sea Cargo
Charter recognizes that such parties can influence maritime decarbonization and,
therefore, Signatories are encouraged to persuade their contractual counterparties
who occupy the position of a charterer in a trade to become Signatories of the Sea
Cargo Charter.
Climate alignment to the IMO absolute GHG reduction target is currently the only
environmental factor considered by the Sea Cargo Charter.
The scope of the Sea Cargo Charter will be reviewed and may be expanded by
Signatories on a timeline that is at their discretion.
4
Sea Cargo Charter
5
Sea Cargo Charter
Principle 1
Assessment of
climate alignment
We will annually assess climate alignment in line

with the Technical Guidance for all chartering
activities.
Our commitment:
Signatories will, on an annual basis, calculate the GHG
emission intensity and total GHG emissions of their chartering
activities, and will assess their climate alignment (carbon
intensity relative to established decarbonization trajectories).
This requirement takes effect for each Signatory in the
following calendar year after the calendar year in which it
became a Signatory.
6
Sea Cargo Charter
Principle 2
Accountability
We recognize the important role that verification

mechanisms play in providing unbiased
information to the industry. We will make our
best effort to rely on such mechanisms, and any
mandatory regulations, as explicitly identified
in the Technical Guidance, for the provision of
information used to assess and report on climate
alignment.
Our commitment:
For each step in the assessment of climate alignment,
Signatories will rely exclusively on the data types, data
sources, and service providers identified in the Technical
Guidance.
7
Sea Cargo Charter
Principle 3
Enforcement
We will ensure ongoing compliance with the Sea

Cargo Charter for new chartering activities through
contractual means by using the Sea Cargo Charter
Clause in charter parties. We will contribute to the
update of the Sea Cargo Charter Clause through the
annual review process.
Our commitment:
Signatories will agree to work with owners, disponent owners and
business partners to collect and process the information necessary
to calculate carbon intensity and total GHG emissions, and assess
climate alignment.
8
Sea Cargo Charter
Principle 4
Transparency
We will publicly acknowledge that we are a

Signatory of the Sea Cargo Charter and we will
publish the results of the climate alignment scores
of our chartering activities on an annual basis in
line with the Technical Guidance.
Our commitment:
1. Upon becoming a Signatory, the Signatory will

publicly acknowledge that it is a Signatory of the Sea
Cargo Charter.
2. On an annual basis, each Signatory will report the
vessel category climate alignment scores and
total annual activity climate alignment score of its
chartering activities and supporting information,
as per the Accountability requirements, to the
Secretariat no later than April 30. This requirement
takes effect for each Signatory in the calendar
year after the calendar year in which it became a
Signatory.
3. On an annual basis, each Signatory will publish the
vessel category climate alignment scores and total
annual activity alignment score of its chartering
activities in relevant institutional reports on a
timeline that is appropriate for that Signatory. This
requirement takes effect for each Signatory in the
calendar year after the calendar year in which it
became a Signatory.
9
Sea Cargo Charter
10
Sea Cargo Charter - Technical
Sea CargoGuidance
Charter
Technical guidance
Introduction
10
2.1 Selecting the right metric 17

for measuring climate alignment
Assessment of 2.2 Sourcing of data 19
climate alignment 2.3 Assessing climate alignment 20
2.4 Decarbonization trajectory 21
12
2.5 Aggregating alignment at the vessel category level 21
and total annual activity
3.1 Accountability 25
3.2 Enforcement 26
3.3 Requirements at each information flow step 27
Accountability 3.3.1 Step 1: Sourcing data 28
and enforcement 3.3.2 Step 2: Calculating voyage level carbon intensity 29
and climate alignment
22 3.3.3 Step 3: Calculating vessel category and total annual 32
activity climate alignment
3.3.4 Step 4: Disclosure 34
3.4 Recommended charter party clause 38
Transparency 4.1 Information flow 41

38
5.1 Standard Declaration 45

How to become 5.2 Signatory Application 46
a Signatory 5.3 Self-Assessment 46
5.4 Timeline 47
42
5.5 Governance 47
Appendices Acknowledgements
49 67
11
1. Introduction Sea Cargo Charter - Technical Guidance
Introduction
The purpose of the Technical Guidance is to clearly state the requirements

and expectations for each principle under the Sea Cargo Charter: Assessment,
Accountability, Enforcement, and Transparency.
The Sea Cargo Charter is a framework for assessing and publishing the climate
alignment of Signatories’ chartering activities. It is supported by a robust and
industry-appropriate climate alignment methodology and carefully considered
accountability and enforcement requirements that support practical and robust
data collection and analysis practices. The Sea Cargo Charter also establishes
transparency requirements for Signatories.
These requirements are stated in the boxes at the top of each section of the
guidance, followed by a more detailed overview of what these requirements entail. A
general timeline of the requirements for Signatories is shown in Figure 1.
Signatories report
Climate alignment scores
climate alignment
published on
scores for the
previous year and
supporting Signatories publish climate
documentation alignments in relevant
institutional reports
Calculation of Climate Alignment
Apr. 30 Jun. 15
Starting in the next calendar year

after becoming a Signatory*
Figure 1.
Timeline for implementation of the Sea Cargo Charter
*The first calendar year of reporting, the Signatory reports on its chartering activities for the previous
year (year of becoming a Signatory), starting from the next fiscal quarter date after the date of
becoming a Signatory. Fiscal quarters starting dates are set as follows: Q1 - January 1, Q2 - April 1, Q3 -
July 1, Q4 - October 1.
Starting from the second calendar year of reporting, the Signatory reports on the entire previous
calendar year.
12
1. Introduction Sea Cargo Charter - Technical Guidance
The Sea Cargo Charter is consistent with the IMO’s ambition for GHG emissions from
international shipping to peak as soon as possible and to reduce the total annual
GHG emissions by at least 50% by 2050 compared to 2008.2
It is recognized that some Signatories may choose to not only fulfil their obligations
under the Sea Cargo Charter but to go beyond these obligations. Some Signatories
may choose to do this through assessing their chartering activities relative
to the Paris Agreement’s well-below 1.5°C objectives, which require a steeper
decarbonization trajectory. It is recommended that, where possible, these additional
efforts rely on the assessment, accountability, enforcement, and transparency
practices established by the Sea Cargo Charter to ensure that these further efforts
are robust in their demonstration of industry leadership.
It should be noted that, while being a Signatory of the Sea Cargo Charter does not
preclude the use of carbon offsetting, this mechanism is not considered when
reporting emissions; thus the full extent of operational emissions are captured in the
assessment of climate alignment.
2 IMO. (2018). Resolution MEPC.304 (72) (adopted on 13 April 2018), Initial IMO strategy on
reduction of GHG emissions from ships, IMO doc MEPC 72/17/Add. 1, Annex 11.
13
Sea Cargo Charter - Technical Guidance
Assessment of
climate alignment
PRINCIPLE
We will annually assess climate alignment in line

with the Technical Guidance for all chartering
activities
REQUIREMENTS
Signatories will, on an annual basis, calculate the GHG

emission intensity and total GHG emissions of their chartering
activities, and will assess their climate alignment (carbon
intensity relative to established decarbonization trajectories).
This requirement takes effect for each Signatory in the
following calendar year after the calendar year in which it
became a Signatory.
2. Assessment of Climate Alignment Sea Cargo Charter - Technical Guidance
This section provides step-by-step guidance for measuring the climate alignment of
Signatories’ annual GHG emission intensity. The guidance is framed in the context of
the existing IMO environmental regulations and climate agreements. This will apply
for international voyages carried out by dry bulk carriers, chemical tankers, oil (crude
and product) tankers and liquefied gas carriers.
Shipping’s governing body, the IMO, approved an Initial GHG Strategy (“the Initial
Strategy”) in April 2018 to reduce GHG emissions generated by shipping activity,
which represents a significant shift in climate ambition for a sector that currently
accounts for 2%–3% of global carbon dioxide emissions. This Initial Strategy sets out
the following levels of ambition:
1. To reduce the total annual GHG emissions by at least 50% by 2050

compared to 2008 (“the IMO Absolute Target”). See Figure 2.
2. To reduce CO2 emissions3 per transport activity by at least 40% by 2030,
pursuing efforts towards 70% by 2050 compared to 2008 (“the IMO
Intensity Targets”). See Figure 3.
1400
Business as Usual
1200
IMO 2050 (50%)
1000
70% CO2 Reduction
800 100% CO2 Reduction
600
400
200
0
2020 2040 2060 2080 2100
Figure 2.
Global fleet’s CO2 targets and trajectories under IMO targets
(million tonnes of CO2)
3 The IMO’s climate goals are currently expressed in terms of reducing operational CO2 emis-
sions. The quantification of GHG emission intensity according to the Sea Cargo Charter will, initially,
also be expressed in terms of CO2 emissions, with the intent to move to CO2 equivalent in line with any
changes agreed by the IMO.
15
The IMO Absolute Target can be converted into a relative (carbon intensity) target.
Figure 3 shows three possible intensity trajectories consistent with the Initial
Strategy compared to the pathway drawn using the IMO Intensity Targets. The IMO
Intensity Targets lie significantly above the other pathways consistent with the IMO
Absolute Target; i.e. there is some misalignment between the IMO Absolute Target
and the IMO Intensity Targets:
1. The IMO Intensity Targets were set prior to the determination of the IMO
Absolute Target. Depending on future demand for shipping services,
the IMO Absolute Target and IMO Intensity Targets may or may not align.
Alignment is unlikely, however.
2. The wording of the IMO Initial Strategy does not state that meeting the IMO
Intensity Targets ensures compliance with the IMO Absolute Target.
3. It is expected that the IMO will update the IMO Intensity Targets to better
align with the IMO Absolute Target during the forthcoming review process
for the IMO’s Initial GHG Strategy.
40% by 2030 Business as Usual

20
IMO 50% CO2 by 2050
15 70% by 2050 IMO CO2 Intensity Targets
70% CO2 Reduction

10
100% CO2 Reduction
0
2020 2040 2060 2080 2100
Figure 3.
Global fleet’s carbon intensity targets and trajectories
(grams of CO2 per tonne-nautical mile [gCO2/tnm])
16
2.1 Selecting the right metric

for measuring climate alignment
Both absolute and intensity-level measurements of GHG emissions are useful to

assess progress towards meeting the IMO levels of ambition, and both measurements
are recommended by other initiatives (e.g. CDP, GLEC etc.). Absolute emissions are
important as they represent the total emissions figure that will ultimately need to be
reduced to mitigate climate change. However, an absolute emissions measure is not
well-suited to the management or comparison of emissions/decarbonization at the
level of individual voyages as these need to be compared on a like-for-like basis. For
this reason, a relative intensity-level metric will be used in the Sea Cargo Charter.
Moreover, to enable alignment with climate goals (IMO), the intensity metric used in
the Sea Cargo Charter will be linked to the IMO Absolute Target.
In shipping, carbon intensity represents the total operational emissions generated

to satisfy a supply of transport activity (measured as grams of CO2 per tonne-
nautical mile [gCO2/tnm]). To provide the most accurate representation of a voyage’s
actual climate impact, the carbon intensity of a voyage should be measured from
its performance in real operating conditions (e.g. following the Energy Efficiency
Operating Indicator (EEOI)), instead of using a design specification metric (e.g., the
Energy Efficiency Design Index (EEDI)).
The selection of this single metric is guided by an ambition to use a carbon intensity
metric which produces the closest measure of the voyage’s true carbon intensity in
operation, to a high level of granularity.
The EEOI does not distinguish between the role of the shipowner and the charterer
in terms of subsequent use and reporting of this information, so implying that the
approach is applicable to all stakeholders. The carbon intensity metric requires the
following data to compute:
1. The amount of fuel consumption for each type of fuel in metric tonnes
(over both ballast and laden legs)
2. The GHG emission factor4 of each fuel type
3. Actual distance traveled in nautical miles (while laden with transported cargo)
4. Amount of cargo transported in metric tonnes over the given voyage as per
the bill of lading5
The IMO’s EEOI sets out data requirements for calculating carbon intensity on a
voyage basis as per Equation 1.
4 Emission factors for marine fuels can be found in the Fourth IMO GHG Study (2020) and
MEPC.308(73). It should be noted that no correction is required for low sulfur fuels as the carbon con-
tent is not altered. As only operational emissions are captured in line with the IMO emission reduction
ambition, carbon factors for net zero carbon fuels based on lifecycle emissions are not considered. If
desired, the consumption of these fuels can be documented in the supplementary fuel fields in the rec-
ommended Sea Cargo Charter Clause’s Data Collection Templates for data reporting, which is available
on the website. See Appendix 6 for the fuel carbon factors for alternative fuels.
Methane slip (during operation) is not currently accounted for in the methodology. This is dependent
on several factors including the propulsion system installed, and additional technologies applied. It is
expected to be included in the methodology once a suitable method of quantification that includes non-
CO2 GHGs is established.
5 For liquified gas carriers, the amount of cargo discharged is to be used for the calculation of
carbon intensity.
17
Ci
x i=
Ti Di
Equation 1.
where Ci is the total CO2 emissions computed using the fuel consumption and
emission factor of each type of fuel, Ti is the amount of cargo transported6, and Di is
the laden distance travelled on voyage i.
For the purposes of this framework, a voyage shall be considered to start at the point
of discharge of the previous cargo and continue to the point of discharge of the cargo
for the voyage under consideration.
While there is no standardized method of operational data collection, the most

basic form of reporting is the noon report which can provide all required information
to calculate carbon intensity. Owners and operators are obliged to document this
data to comply with the IMO Data Collection System (DCS) and the EU Monitoring,
Reporting and Verification (MRV) schemes. However, charterers may not always have
access to this data, prohibiting them from calculating carbon intensity directly. The
carbon intensity is computed for all voyages that end during the reporting period, i.e.
a calendar year.
6 See Appendix 3 for guidance on particular cases.
18
2.2 Sourcing of data
The chartering regime in bulk shipping can be broadly divided into time charters (TC)
and voyage charters (VC)7. When on TC, charterers pay a daily rate for a fixed time
period as well as all voyage costs including bunker. Given that the charterers also
dictate operations, all three elements (fuel, load and distance) required to calculate
carbon intensity on distinct voyages are already known to them. In situations where
required data is not known to the charterer, the vessel owner, or the disponent
owner, shall be requested to commit to provide noon reports or voyage reports to the
charterer in the charter party, thus establishing an agreement to share the relevant
data. In this case, all emissions from the laden leg, ballast leg and port emissions are
included implying full transparency between owners and charterers.
More typical in the wet bulk market, on VC, the charterer pays a transactional rate
(usually per tonne of cargo or on WorldScale) based on the route and amount of
cargo transported, with the owner bearing both the operational costs and voyage
costs. In this case, charterers do not, in normal circumstances, have access to fuel
consumption for the voyage and, in the case of vessels carrying multiple cargoes,
the proportion of cargo each charterer has on board is unknown. For the purposes of
calculating carbon intensity, the exact distance sailed is also unknown although it
may be estimated or obtained from standard route tables.
In both cases, data and consent for use is to be provided by owners to Signatories of
the Sea Cargo Charter through additional clauses in the respective charter parties as
described under Principle 3 – Enforcement.
In some cases, there may be a chain of charters; for example, a company may take a
vessel on a long-term TC arrangement and then charter out on a VC arrangement. In
such a case it would be expected that the time charterer, who has all the necessary
information, would provide the subset of information relevant for the voyage
charterer to meet the requirements of the Sea Cargo Charter.
7 Bareboat charter can be considered a special case of TC.
19
2.3 Assessing climate alignment
For the purposes of the Sea Cargo Charter, climate alignment is defined as the
degree to which voyage carbon intensity of a vessel category is in line with a
decarbonization trajectory that meets the IMO ambition of reducing total annual GHG
emissions by at least 50% by 2050 based on 2008 levels.
A decarbonization trajectory is a representation of how many grams of CO2 can

be emitted to move one tonne of goods one nautical mile (gCO2/tnm) over a
time horizon (as shown in Figure 3). The decarbonization trajectory relies on two
assumptions:
• projections of transport demand for different shipping sectors out to 2050,
including those available in the Fourth IMO GHG Study8,
• the total CO2 shipping emissions permitted to be in-line with the IMO’s 2050
target.
While the trajectory will be drawn and updated with the latest available research
and will be aligned to or equal to the IMO’s projections, there are uncertainties within
them because of the two assumptions noted above.
To assess the climate alignment of a single voyage, the voyage carbon intensity is
compared to the required baseline carbon intensity for its respective ship type and
size category. To assess climate alignments at the vessel category and annual activity
level, the voyage carbon intensities are aggregated as discussed in Section 2.5.
15
Carbon Intensity Measure
10
Δi
0
2010 2020 2030 2040 2050
Figure 4.
Assessing alignment at the voyage level
8 Jasper Faber, Shinichi Hanayama, Shuang Zhang, Paula Pereda, Bryan Comer, Elena Hauer-
hof, Wendela Schim van der Loeff , Tristan Smith, Yan Zhang, Hiroyuko Kosaka, Masaki Adachi, Jean-
Marc Bonello, Connor Galbraith, Ziheng Gong, Koichi Hirata, David Hummels, Anne Kleijn, David S. Lee,
Yiming Liu, Andrea Lucchesi, Xiaoli Mao, Eiichi Muraoka, Liudmila Osipova, Haoqi Qian, Dan Rutherford,
Santiago Suárez de la Fuente, Haichao Yuan, Camilo Velandia Perico, Libo Wu, Deping Sun, Dong-Hoon
Yoo and Hui Xing. 2021, Fourth IMO GHG Study 2020. International Maritime Organization, London, UK.
20
In Figure 4, each dot represents the carbon intensity of a voyage and the blue curve
represents the required carbon intensity baseline for a given ship type and size. The
green dots are aligned, and the red dots are misaligned.
Climate alignment at the voyage level is the percentage difference between a voyage
carbon intensity and the decarbonization trajectory at the same point in time. It is
expressed as a (+/-) %. In mathematical terms, alignment at a particular year is:
x i-r s
(
(
Δ i= 100
rs
Equation 2.
where xi is the carbon intensity (from Equation 1) of voyage i and rs is the required
carbon intensity for the vessel for the year multiplied by 100 to convert into
percentage terms. A positive alignment score means a voyage is misaligned (above
the decarbonization trajectory), whereas a negative or zero score means a voyage is
aligned (below or on the decarbonization trajectory).
2.4 Decarbonization trajectory
A decarbonization trajectory is produced by the Secretariat of the Sea Cargo Charter

based on agreed and clearly-stated assumptions. This is accompanied by a baseline
for each ship type as defined in the Fourth IMO GHG Study and is produced in a
format that allows for simple weighting aggregation. This is to ensure that once the
carbon intensity of voyages is understood, it is simple and practical to understand
climate alignment. This also ensures that numbers are comparable between
Signatories.
Appendix 4 describes the method used for establishing the target carbon intensity
for a given ship type and size class in a given year. This is carried out by calculating
a decarbonization-consistent carbon intensity from 2012 out to 2050. The method
is derived from IMO Secretariat commissioned data sources from the Fourth IMO
GHG Study. Assumptions for formulating the trajectory are also taken from the Initial
Strategy, including the use of a 2008 baseline.
2.5 Aggregating alignment at the vessel category level

In order to calculate annual activity climate alignment, one must first calculate the
climate alignment of activity within the type and size category (also called vessel
category)9.
Example 1 on the next page shows a simple calculation of climate alignment.

Appendix 5 illustrates climate alignment calculations for bulk and chemical parceling.
9 See Appendix 3 for guidance on particular cases and Appendix 4 for further clarification on
the provision of trajectories and definition of vessel categories.
21
Steps for calculating climate alignment by vessel category:

The vessel category activity alignment is computed by applying Equation 3.
Equation 3.
where ∆j is the category activity alignment for Nj voyages by vessels in category j

with carbon emissions CO2i and transport work Wi with rsjDWT being the required carbon
intensity for the vessel category and size for the year under assessment.
Steps for calculating climate alignment of total annual activity:

The annual activity alignment is computed similarly by applying Equation 4 over all
voyages.
Equation 4.
where ∆k is the annual activity alignment for Nk voyages by vessels in category j with
carbon emissions CO2i and transport work Wi with rsjDWT being the required carbon
intensity for the vessel category and size for the year under assessment.
The following table determines the vessel size categories used in the worked
example on page 23.
Vessel type Vessel size category Size Units

Bulk Carrier 1 0-9999 dwt
Bulk Carrier 6 200000-+ dwt
Chemical tanker 1 0-4999 dwt
Chemical tanker 5 40000-+ dwt
Liquefied gas tanker 1 0-49999 cbm
Liquefied gas tanker 4 200000-+ cbm
Oil tanker 1 0-4999 dwt
Oil tanker 8 200000-+ dwt
Table 0.
Vessel size categories.
22
Example 1: Calculating alignment at the category level

In this example, a Signatory measures its climate alignment for 2022.

• Table 1 illustrates a simple example of a series of voyages showing the
alignment deltas.
• The category alignment delta shown in Table 2 presents the average for
each vessel category (type and size).
• The annual activity alignment in Table 3 is calculated using a weighted
average according to Equation 4. Weighting is applied according to
transport activity undertaken by each category.
The Signatory’s chartering activities are climate aligned because they are on
average 16.8% below the carbon intensity required for decarbonization in 2021.
Actual
Vessel Transport CO2 Required
Vessel Voyage CO2 Alignment
size IMO DWT Year Work Intensity CO2 Intensity
type ID (t) Delta (%)
category (Mtnm) (gCO2/ (gCO2/tnm)
tnm)
Bulk 3 9511349 45,000 #### 2022 76.98 1,000 12.99 8.96 44.9
Carrier
Bulk 3 9511349 59,000 #### 2022 109.34 890 8.14 7.90 3.0
Carrier
Bulk 5 9762148 188,000 #### 2022 1,428.57 7,000 4.90 4.60 6.5
Carrier
Bulk 6 9112654 230,000 #### 2022 1,559.63 8,500 5.45 4.19 30.2
Carrier
Oil 3 9293739 17,000 #### 2022 25.46 600 23.57 29.12 -19.0
Tanker
Oil 4 9331517 46,000 #### 2022 348.26 2,800 8.04 16.77 -52.1
Tanker
Oil 2 9268416 8,000 #### 2022 9.24 300 32.47 44.22 -26.6
Tanker
Oil 4 8962134 53,000 #### 2022 418.99 3,000 7.16 15.50 -53.8
Tanker
Values for Actual CO2 Intensity and Required CO2 Intensity are Table 1.
rounded to two decimals.
Voyage alignment
Weighted
Vessel Average CO2
Transport average
Vessel type size Year CO2 (t) intensity (gCO2/ Alignment delta (%)
work (Mtnm) required CO2
category tnm) intensity
Bulk Carrier 3 2022 186.3 1,890 10.1 8.3 21.6

Bulk Carrier 5 2022 1,428.6 7,000 4.9 4.6 6.5
Bulk Carrier 6 2022 1,559.6 8,500 5.5 4.2 30.2
Oil Tanker 2 2022 9.2 300 32.5 44.2 -26.6
Oil Tanker 3 2022 25.5 600 23.6 29.1 -19.0
Oil Tanker 4 2022 767.3 5,800 7.6 16.1 -53.0
Values for Actual CO2 Intensity and Required CO2 Intensity are Table 2.
rounded to two decimals.
Category alignment
Year Transport Work (Mtnm) CO2 (t) Alignment Delta (%)
2022 3,976.5 24,090.0 -14.4
Table 3.
Annual activity alignment
23
Accountability
and enforcement
This section provides the requirements and technical guidance for both the
accountability and enforcement principles for the sake of clarity and simplicity.
The accountability and enforcement principles are intended to ensure that the
assessment and disclosure of climate alignment under the Sea Cargo Charter is
practical, fair, and accurate. The intent of this approach is to ensure the development
of trust in the Sea Cargo Charter and amongst Signatories.
The Technical Guidance for the accountability and enforcement principles lays out
the steps in the Sea Cargo Charter’s information flow process. At each step, the
assessment and enforcement requirements are clearly identified.
3. Accountability and enforcement Sea Cargo Charter - Technical Guidance
3.1 Accountability
PRINCIPLE
We recognize the important role that verification

mechanisms play in providing unbiased
information to the industry. We will make our
best effort to rely on such mechanisms, and any
mandatory regulations, as explicitly identified
in the Technical Guidance, for the provision of
information used to assess and report on climate
alignment.
REQUIREMENTS
For each step in the assessment of climate alignment,

Signatories will rely exclusively on the data types, data sources,
and service providers identified in the Technical Guidance.
25
3.2 Enforcement
PRINCIPLE
We will ensure ongoing compliance with the Sea

Cargo Charter for new chartering activities through
contractual means by using the Sea Cargo Charter
Clause in charter parties. We will contribute to the
update of the Sea Cargo Charter Clause through
the annual review process.
REQUIREMENTS
Signatories will agree to work with owners, disponent owners

and business partners to collect and process the information
necessary to calculate carbon intensity and total GHG
emissions, and assess climate alignment.
26
3.3 Requirements at each information flow step
This section is broken into four steps with information flowing from one to the next.
The intent of this section is to give appropriate background and clearly demonstrate
how information flows between parties. Specific accountability requirements
regarding data types, data sources, and service providers are stated at each step.
The enforcement requirement of using a recommended charter party clause is
detailed in Section 3.4, while the Sea Cargo Charter Clause itself and Data Collection
Templates are available on the website. The Sea Cargo Charter’s information flow
process relies on data that owners are required to report to Signatories as stated in
the recommended Sea Cargo Charter Clause.
Figure 5 provides an overview of the potential information flow pathways. The

pathways are divided into “preferred pathways” and “allowed pathways” tracks.
Preferred pathways are those that include verification mechanisms to maintain data
veracity.
For sake of clarity, once a Signatory has chosen either the preferred or allowed
pathways track, it may choose any option available for that step. For example, if a
Signatory chooses the preferred pathways track, it may choose to use either of the
two available options for steps 2 and 3.
Information flow step Options at each information flow step
Preferred Pathways Track Allowed Pathway Track
(Disponent) (Disponent)
1. Sourcing data
Owner Owner
& Signatory & Signatory

(internal) (internal)
2. Calculating
voyage level carbon Signatory Signatory
intensity and 3rd Party
climate alignment
Signatory
3. Calculating vessel
(internal)
category and total 3rd Party Signatory
annual activity & 3rd Party (internal)
climate alignments verification
Signatory Signatory
4. Disclosure
Figure 5.
Information flow pathway tracks
3.3.1 Step 1: Sourcing data
Information flow step Options at each information flow step
(Disponent) (Disponent)
1. Sourcing data Owner Owner
& Signatory & Signatory

Figure 6.
Data sourcing
Step 1 requires the sourcing of data for the calculation of carbon intensity. As Figure
7 indicates, there is one method for sourcing measured data, which is applicable to
both the preferred and allowed pathway tracks. Signatories are expected to already
have all the necessary data for time charters, so will likely only need to source data
from owners for voyage charters. If, and only if, measured data can’t be sourced for
ballast legs, the Signatory will source estimated data. The recommended charter
party clause - the Sea Cargo Charter Clause - ensures that the appropriate data
and information are requested by, and provided to, Signatories by their contractual
counterparties, the appropriate consents are given for the sharing of data, and
appropriate privacy protections are established.10
Preferred & Allowed Pathways Tracks
Source data for

missing ballast legs
Source data for Source data for
from one of three ways:
voyages under voyages under a. AIS
voyage charter from time charter from b. Extrapolation from actual
Owner Signatory ballast legs
c. Distance or voyage calculator
Method:
Signatory collects data
Figure 7.
Method for sourcing data
10 See Section 3.4 and Appendix 6. The Sea Cargo Charter Clause is available on the website.
28
Method (preferred and allowed pathways):
Owners provide measured data as noon or voyage reports for voyages under voyage
charter11. Signatory provides data for voyages under time charter.
1. Signatory requests owners to provide noon or voyage reports for each
voyage under voyage charter, containing:
a. Fuel type and consumption for all bunker consumed by main propulsion,
auxiliary machinery, boilers, gas combustion unit, inert gas generators and
all primary energy consumers in metric tonnes over the preceding ballast
and laden leg of interest12
b. Actual distance sailed laden with the charterer’s cargo in nautical miles13
c. Amount of cargo transported in metric tonnes over the given voyage as
per the bill of lading14
2. Owners provide the data as requested above.
• Signatories are to ensure that obvious errors are corrected at source
(vessels/shipowners from where the data originated). If data can’t be
corrected at source, it should be categorized and reported under the
percentage of eligible chartering activities non-reporting.
• No filters/omission should be applied to voyage EEOI result calculation
for the higher order reporting (vessel category and total annual climate
alignments) if the input raw data for voyages are correct (i.e., distance,
cargo, consumption etc.).
3. Signatory gathers the same data (1.a, 1.b, 1.c) for each voyage under time
charter.
4. If and only if measured data can’t be sourced for ballast legs, the
Signatory will source estimated data.15 Estimated data can be sourced
in one of three ways:
a. From AIS based estimated data.
b. From extrapolation from actual ballast leg data for other voyages or
other vessels within the missing vessel’s reporting category.
c. By using a distance table or voyage calculator with vessels’ ballast
speed and consumption.
Note that consent for the owner to share data with the Signatory is given through the
recommended Sea Cargo Charter Clause.
How to meet the requirements:
Measured voyage data and related noon reports or voyage reports must be sourced
from the owners for each voyage under voyage charter. Data must be gathered by the
Signatory for each voyage under time charter. Estimated data must be sourced by the
Signatory for missing ballast legs if measured data can’t be sourced.
11 A set of guidelines or standards will be developed for owners to follow when submitting fuel/
cargo data that supports the reporting requirements of the Sea Cargo Charter. It is anticipated that
these will include recommendations with regards to the process for verification (e.g. by Recognized
Organizations) as well.
12 If the charterer’s cargo forms only part of the total amount of cargo transported, an amount
of fuel (for each fuel type) proportional to the share of the total cargo carried should be used to calcu-
late the emissions.
13 In exceptional circumstances where owners are not able to provide the actual distance sailed,
input from distance tables is accepted. Given that table distances are usually shorter than actual dis-
tances, this will increase carbon intensity making alignment more challenging.
14 For liquified gas carriers, the amount of cargo discharged is to be used for the calculation of
carbon intensity.
15 Estimated data can only be used for missing ballast legs and as a fallback option if meas-
ured data can’t be sourced. This is to ensure that the methodology does not create disincentives to
source data for ballast legs when the laden leg is reported. Estimated data can’t be used for voyages
other than ballast legs; other data gaps will be reflected in the percentage of eligible chartering activi-
ties non-reporting in line with the reporting requirements in Section 3.3.4.
29
3.3.2 Step 2: Calculating voyage level carbon intensity and climate alignment
Options at Each Information Flow Step
Information Flow Step Options at each information flow step
Preferred Pathways Track

2. Calculating voyage
Signatory Signatory
level carbon intensity 3rd Party
and climate alignment
Figure 8.
Voyage climate alignment calculation
Step 2 requires the calculation of voyage carbon intensity using both data from the
owner and from the Signatory itself, and the calculation of voyage climate alignment
with decarbonization trajectories. There are 2 methods for undertaking these
calculations: either internally by the Signatory itself or by a third party.
EEOI is used as the carbon intensity metric and is detailed in Section 2.1. Standard
decarbonization trajectories for each ship type and size class are produced
specifically for the purposes of the Sea Cargo Charter so that all calculations
are made in the same way.16 These are available through the Sea Cargo Charter
Secretariat. Figure 9 demonstrates where to source the information and who can
perform calculations.
Preferred Pathways Track Preferred & Allowed Pathways Track
Source data Source data Source data Source data

from from Secretariat from from Secretariat
Signatory Standard Signatory Standard
decarbonization (from step 1) decarbonization
(from step 1) trajectories trajectories
Method 1 Method 2
Third party performs calculations Signatory performs calculation
Figure 9.
Method for calculating carbon intensity & voyage climate
alignment
16 See guidance in Section 2.4 and Appendix 4 for further clarification on the provision of
trajectories.
30
Permissible methods for calculation
Method 1 (preferred pathway): Third party performs voyage carbon intensity and
climate alignment calculations on behalf of the Signatory.
1. The third party will source the data for all voyages from step 1 from
the Signatory and the standard decarbonization trajectories from the
Secretariat.
2. The third party calculates the carbon intensity of the voyages and the
decarbonization delta for the voyages.
Method 2 (preferred & allowed pathways): Signatory performs voyage carbon

intensity and climate alignment calculations.
1. The Signatory will source the standard decarbonization trajectories from
the Secretariat.
2. The Signatory calculates the carbon intensity of the voyages and the
decarbonization delta for the voyages, using data from step 1 and the
decarbonization trajectories.
How to meet the requirements
1. Voyage carbon intensity and climate alignment calculations must rely

solely on reliable data for the voyages and on standard decarbonization
trajectories provided by the Sea Cargo Charter Secretariat.
2. Voyage carbon intensity (EEOI) and voyage decarbonization delta
calculations can be performed by a third party or by the Signatory.
31
3.3.3 Step 3: Calculating vessel category and total annual activity

climate alignment Options at Each Information Flow Step
Information Flow Step Options at each information flow step
Signatory
3. Calculating vessel (internal)
category and total 3rd Party Signatory
annual activity climate & 3rd Party verification (internal)
alignments verification
Figure 10.
Vessel category and total annual activity alignment
calculations
Step 3 requires the calculation of vessel category climate alignment and the
total annual activity climate alignment using the voyage climate alignment
data from step 2. There are three methods for undertaking these calculations:
under the preferred pathway track, the calculation is either performed by
a third party on behalf of the Signatory, or by the Signatory together with a
validation of the data (from step 1) and verification of the methodology for the
calculation (from steps 2 and 3) by a third party. The allowed pathway track
allows the Signatory to perform the calculation internally.
Source voyage Source data

alignments from from
Third party Signatory
(from step 2) Source voyage (from step 2)
alignments from
Signatory
(from step 2)
Signatory
Method 1 provides Method 3
calculations
Third party performs from steps 2&3 Signatory performs
calculations calculation
Method 2 (a) Method 2 (b)
Signatory performs Third party validates
calculations Third party methodology for
Third party issues issues verification performing calculations
verification statement statement
Signatory
Figure 11.
Method for calculating climate alignment of
chartering activities
32
Permissible calculation methods
Method 1 (preferred pathway): Third party performs total annual and vessel category
climate alignment calculations on behalf of the Signatory.
1. The third party calculates the decarbonization delta for each vessel
category and the total annual decarbonization delta, using data from step
2.
2. The third party validates the data used to perform the calculations. The
third party issues a verification statement / report.
3. The third party provides the Signatory with the alignment deltas and
verification statement / report.
Method 2 (preferred pathway): Signatory performs total annual and vessel category
alignment calculations which are verified by a third party.
1. The Signatory calculates the decarbonization delta for each vessel’s
category and the total annual decarbonization delta, using data from step 2.
2. The selected third party sources calculations from the Signatory.
3. The selected third party validates the data and methodology used to
perform the calculations by the Signatory, in line with the methodology
outlined in Section 2.
4. The third party provides the Signatory with the verification statement /
report.
Method 3 (allowed pathways): Signatory performs total annual and vessel category
climate alignment calculations.
1. The Signatory calculates the decarbonization delta for each vessel’s
category and the total annual decarbonization delta, using data from step 2.

1. Calculations of vessel category and total annual activity climate alignment
must rely solely on reliable data provided by the owner and on standard
decarbonization trajectories provided by the Sea Cargo Charter Secretariat.
2. Total and vessel category climate alignment can be performed by a third
party or by the Signatory.
3. Under the preferred pathway, the third party issues a verification statement
/ report.
33
3.3.4 Step 4: Disclosure

Options at Each Information Flow Step
Disclosure Options at each information flow step
Preferred Pathways Track

Signatory Signatory
4. Disclosure (internal) (internal)
Figure 12.
Method for disclosure
Step 4 establishes disclosure requirements that will serve as a quality control

mechanism. The information outlined below will be submitted to the Secretariat
and made available only to Signatories with the intent of informing the actions
of the Steering Committee. Information submitted under these requirements will
not be made public. This is intended to establish a quality control mechanism for
Signatories while also ensuring that information that may be regarded as sensitive
by some Signatories is not publicly disclosed. There is one method, which is
applicable to the preferred and allowed pathway tracks.
Preferred and Allowed
Pathways Track
Source data
from Signatory
Information from
steps 1, 2, & 3
Method
Signatory prepares disclosures
and submits to the Secretariat as per
Transparency requirements
Figure 13.
Disclosure
34
Method (preferred and allowed pathways): Signatory prepares disclosures and

submits to the Secretariat.
1. If the Signatory is unable to collect data for some portion of its chartering
activities, the Signatory should calculate the percentage of its eligible
chartering activities for which it cannot report. This percentage is
calculated out of the total number of voyages, relying on the methodology
outlined in Section 2.5.
2. The Signatory should also:
a. calculate the percentages of eligible chartering activities reported
through preferred pathway and allowed pathways tracks, relying on the
methodology outlined in Section 2.5;
b. calculate the percentages of eligible chartering activities for which
measured and estimated data were used, relying on the methodology
outlined in Section 2.5;
c. list the source(s) used for estimated data (4.a, 4.b or 4.c as outlined in
Section 3.3.1);
d. list the names of service providers (i.e. third party) it used, if any, to
complete steps 2 and 3 (i.e., those steps identified in Sections 3.3.2–3.3.3)
e. source third party verification statement(s) / report(s).
3. The Signatory should provide the following information to the Secretariat:
• vessel category climate alignment scores (percentage),
• total annual activity climate alignment score (percentage),
• the list of the scope’s segments included in the eligible reporting chartering
activities,
• percentage of eligible chartering activities non-reporting as outlined above
in (1),
• additional information as outlined above in (2.a), (2.b), (2.c), (2.d), (2.e).
The Signatory should provide the following information to the Secretariat in line with
transparency requirements identified in Section 4:
• vessel category climate alignment scores (percentages),

• total annual activity climate alignment score (percentage),
• scope’s segments included in the eligible reporting chartering activities,
• percentage of eligible chartering activities non-reporting ,
• percentages of eligible chartering activities for which preferred and
allowed pathway tracks were used,
• percentages of eligible chartering activities for which measured and
estimated data were used,
• and a list of sources used for estimated data,
• a list of the names of the third parties it used, if any, to complete steps 2
and 3,
• and third parties’ associated verification statement(s) / report(s).
35
Example 2: Meeting disclosure requirements
In this example, a Signatory successfully completes the assessment of its chartering

activities climate alignment.
In addition to reporting its climate alignment scores to the Secretariat, it also reports
the following information, which is demonstrated in Table 4 below.
The information in Table 4 is not made public by the Secretariat.
The Signatory Reporting Template is available from the website.
Reporting vs. non-reporting Validation

Proportion of activities reported, against % of eligible chartering activities
(L1) 99%
(calculated out of the total number of voyages) L1 + L2 =
Portion of activities not reported, against % of eligible chartering activities 100%
(L2) 1%
(calculated out of the total number of voyages)
Measured vs. estimated data Validation
Proportion of eligible chartering activities for which measured data were
(L3) 97%
used (calculated out of the total number of voyages)
Proportion of eligible chartering activities for which estimated data were
(L4) 2%
Source for estimated data*: L2 +L3 + L4 =
*Estimated data can be sourced by one of three ways: 100%
a. from AIS based estimated data,
b. from extrapolation from actual ballast leg data for other voyages or other a. AIS data
vessels within the missing vessel’s reporting category,
c. by using a distance table or voyage calculator with vessels’ ballast speed
and consumption.
Preferred vs. allowed pathway Validation
Proportion of eligible chartering activities for which preferred pathway was
(L5) 90%
Step 1. Sourcing data Sourced internally
Third party/service providers used:

Step 2. Calculating voyage level
Note: Method statement for validation Made calculations L2 + L5 + L6 =
carbon intensity and climate
presented by third party to be provided internally 100%
alignment
at submission.
Made calculations
Step 3. Calculating vessel internally.
category and total annual activity Verification by third
climate alignments party: company
name XXX
Proportion of eligible chartering activities for which allowed pathway was
(L6) 9%
Table 4.
Example of disclosure requirement submission
36
3. Accountability and enforcement Sea Cargo Charter
37
3.4 Recommended charter party clause
Key to supporting the accurate assessment of climate alignment and to creating

an equal burden on all Signatories is a contractual mechanism that ensures that
the appropriate data and information are requested by, and provided to, Signatories
by their contractual counterparties, that the appropriate consents are given for
the sharing of data, and that appropriate privacy protections are established. The
mechanism agreed for the Sea Cargo Charter to achieve this is a recommended
clause to be proposed and included as part of the charterparty agreement negotiated
with the contractual counterparty.17 The Sea Cargo Charter Clause and supporting
Data Collection Templates are available on the website.
The Sea Cargo Charter Clause - and supporting Data Collection Templates - are
designed to be generic and broad in its nature (so as to be consistent with any
charter party form or type of trade) and non-prescriptive (so as to reduce the impulse
for amendment from contractual counterparties).18 It is hoped that this approach will
maximize the appeal and widen the future endorsement of a charter party clause
linked to the Sea Cargo Charter.19
In all new chartering activities that are finalized after a charterer becomes a
Signatory of the Sea Cargo Charter, the Signatory must use commercially reasonable
efforts to include the wording, and particularly the data requirement, set out
in the recommended Sea Cargo Charter Clause in the negotiated charter party
documentation.
17 See Appendix 6.
18 Because there are slight differences in the way that time and voyage charter agreements are
formulated, it may be necessary in the future to develop two different charter party clauses.
19 The Secretariat will endeavor to engage with those organizations to whom the market has
entrusted the production of contractual terms with a view to including the wording of this recommended
charter party clause as part of the recognized industry standard terms.
38
39
Transparency
This section states the requirements for the transparency
principle and provides the expectations and intent of each
requirement. It also provides an outline of the timeline for the
participation in and compliance with the Sea Cargo Charter.
PRINCIPLE
We will publicly acknowledge that we are a

Signatory of the Sea Cargo Charter and we will
publish the results of the climate alignment scores
of our chartering activities on an annual basis in
line with the Technical Guidance.
REQUIREMENTS
1. Upon becoming a Signatory, the Signatory will publicly

acknowledge that it is a Signatory of the Sea Cargo
Charter.
2. On an annual basis, each Signatory will report the
vessel category climate alignment scores and total
annual activity climate alignment score of its chartering
activities and supporting information, as per the
Accountability requirements, to the Secretariat no later
than April 30. This requirement takes effect for each
Signatory in the calendar year after the calendar year in
which it became a Signatory.
3. On an annual basis, each Signatory will publish the vessel
category climate alignment scores and total annual
activity alignment score of its chartering activities
in relevant institutional reports on a timeline that is
appropriate for that Signatory. This requirement takes
effect for each Signatory in the calendar year after the
calendar year in which it became a Signatory.
40
4. Transparency Sea Cargo Charter - Technical Guidance
4.1 Information flow

Requirement 1
Upon becoming a Signatory, that Signatory will
publicly acknowledge that it is a Signatory of the
Sea Cargo Charter.
Publication by Sea Cargo

Requirement 2
Charter Secretariat
On an annual basis, each Signatory will report the
vessel category climate alignment scores and the The Secretariat will collect reported
total annual activity alignment score of its submissions from all eligible
Signatory chartering activities and supporting information as Signatories. By 15 June annually,
per the accountability requirements to the the Secretariat will publish all
Secretariat no later than 30 April. This requirement vessel category climate alignment
takes effect for each Signatory in the calendar year scores and total annual activity
after the calendar year in which it became a climate alignment scores at
Signatory. www.seacargocharter.org
Requirement 3
On an annual basis, each Signatory will publish the
vessel category climate alignment scores and the
total annual activity alignment score of its Figure 14.
chartering activities in relevant institutional reports
on a timeline that is appropriate for that Signatory.
Information flow for transparency requirements
Figure 14 demonstrates the information flow for each transparency requirement.

Below, expectations and intent of each transparency requirement are further
clarified.

1. The expectations of transparency requirement 1 are that a Signatory should
make publicly known that it is a Signatory of the Sea Cargo Charter in a
manner that is suitable for its organization. The intent of this requirement
is to simply ensure awareness of the Sea Cargo Charter and to ensure
that it is clear which organizations are Signatories without creating any
significant burden to them. Announcement Guidelines are available from
the Secretariat.
2. The expectations of transparency requirement 2 are that a Signatory
should report all required information to the Sea Cargo Charter Secretariat
(total annual and vessel category climate alignments and supporting
information as per the accountability requirement) in a timely manner (no
later than 30 April) in accordance with the Assessment, Accountability
and Enforcement, and Transparency Technical Guidance. Figure 15 shows
which information becomes public and which information remains
confidential. The intent of this requirement is to ensure that accurate
information can be published by the Sea Cargo Charter Secretariat to
www.seacargocharter.org in a timely manner (no later than 15 June). The
required reporting timeline is intended to create as little burden as possible
to Signatories.
3. The expectations of transparency requirement 3 are that a Signatory
should identify relevant institutional reports and ensure that the climate
alignments of its chartering activities are included in them. Due to different
institutional timelines, no specific expectations have been set for when
reports including vessel category and total annual climate alignment
scores should be published. The intent of this requirement is not to specify
precisely where this information should be published or create a significant
burden for Signatories. Instead, it is intended to ensure awareness of the
Sea Cargo Charter and its approach.
41
Signatory reporting requirements
Becomes public Only shared with Secretariat

and other Signatories
• Vessel category • Percentage of eligible chartering activities
climate alignment non-reporting.
• Total annual activity • Percentages of eligible chartering activities
climate alignment for which preferred and allowed tracks
• Scope’s segments were used.
included in eligible • Percentages of eligible chartering activities
reporting chartering for which measured and estimated data
activities were used, and the source for estimated
data.
• A list of the names of the third parties it
used, if any, to complete steps 2 and 3 and
the associated verification statement /
report.
Figure 15.
Signatory reporting requirements
Specificities for the first calendar year of reporting:
For the first calendar year of reporting (i.e., the following calendar year after the
calendar year of becoming a Signatory), the Signatory reports on its chartering
activities for the previous year (i.e., for the year of becoming a Signatory) starting
from the next fiscal quarter date after the date of becoming a Signatory.
Fiscal quarter dates are set as follows:
1. Q1 - starts January 1st
2. Q2 - starts April 1st
3. Q3 - starts July 1st
4. Q4 - starts October 1st
Starting from the second calendar year of reporting, the Signatory reports on the
entire previous calendar year (from January 1st to December 31st of that year).
42
Example 3: Start of reporting obligations

Signatory A becomes a Signatory on 10 February 2021 (during Q1):
• Signatory A reports in 2022 on its chartering activities from 1 April 2021 (start of
Q2) to 31 December 2021.
• In 2023, Signatory A will report on its chartering activities for the entire 2022
year.
Signatory B becomes a Signatory on 2 August 2021 (during Q3):

• Signatory B reports in 2022 on its chartering activities from 1 October 2021 (start
of Q4) to 31 December 2021.
• In 2023, Signatory B will report on its chartering activities for the entire 2022
year.
Signatory C becomes a Signatory on 20 November 2021 (during Q4):

• Signatory C will not report in 2022 on its chartering activities for 2021.
• In 2023, Signatory C will report on its chartering activities for the entire 2022
year.
Example 4: Transparency
In this example, a lender becomes a Signatory of the Sea Cargo Charter in May 2021.
Requirement 1: Charterer issues a press release announcing that it is a Sea Cargo

Charter Signatory in May 2021.
The Signatory starts collecting data for all its chartering activities from the beginning
of the next fiscal quarter after becoming a Signatory; in this example from the
beginning of Q3, which starts on 1 July 2021.
Requirement 2: Prior to 30 April 2022, the Signatory submits its climate alignment
scores (total annual and by vessel category) for 2021 and supporting information as
per the accountability requirements. In this example, the Signatory is climate aligned
because it has a score of -2.6% indicating that it is 2.6% below the decarbonization
trajectory.
Requirement 3: The Signatory includes in its annual sustainability report its vessel
category and total annual climate alignment scores.
Publication by Sea Cargo Charter Secretariat: All eligible Signatories’ 2021 vessel
category climate alignment scores and total annual activity climate alignment
scores will be published online around 15 June 2022.
43
4. How to become a Signatory Sea Cargo Charter - Technical Guidance
How to become
a Signatory
The following outlines the

process for charterers to become
Signatories and highlights the
necessary documents.
This document is intended

to be a how-to guide for the
administrative aspects of
implementing the Sea Cargo
Charter by proposed Signatories.
44
Charterers falling under the scope and wishing to become a Signatory of the Sea
Cargo Charter must adhere to the following process:
1. Using the Standard Declaration and Signatory Application provided by the

Secretariat, a charterer wishing to become a Signatory must complete and
send both documents to the Secretariat.
2. The charterer must complete and submit the Sea Cargo Charter Self-
Assessment to the Secretariat within five (5) months of becoming a
Signatory.
All onboarding documents are available from the Secretariat.
Step 1 Step 2
Submit Signatory Application, Prepare and submit the Self-
Standard Declaration, and Assessment within 5 months
Membership Agreement of becoming a Signatory
5.1 Standard Declaration
The Standard Declaration is the formal commitment required of charterers to

become a Signatory. Step one of the process, the Standard Declaration, announces
the intent of the charterer to follow all legally binding requirements of the Sea
Cargo Charter. This means that the institution is prepared to take the necessary
steps to comply with all four Principles under the Sea Cargo Charter, and have this
commitment and related reporting made public.
45
5.2 Signatory Application
Along with the Standard Declaration, the charterer wishing to become a Signatory
must also complete the Signatory Application document.
This document outlines who is responsible for contact, reporting, invoicing, and other
necessary functions to implement and maintain the Sea Cargo Charter within the
Signatory’s organization.
5.3 Self-Assessment
Upon becoming a Signatory, each Signatory has five (5) months to complete this
Self-Assessment and return it to the Sea Cargo Charter Secretariat.
The purpose of this is to ensure that each Signatory has made appropriate
arrangements to fulfill its obligations under the Sea Cargo Charter and identified any
challenges to doing so. The Self-Assessment is as brief as possible to reduce the
administrative burden, while still addressing the core responsibilities of Signatories
of the Sea Cargo Charter. The questions focus on ensuring that Signatories are aware
of timelines and obligations under the Sea Cargo Charter, have engaged internal
stakeholders, have engaged business partners, and have a plan for engaging the
necessary third parties to verify their climate alignment assessment.
46
5.4 Timeline
Charterer wishing to
become a Signatory
submits the Signatory
Application, Standard
Declaration, and Charterer becomes a Signatory submits
Membership Agreement Signatory after having Self-Assessment
formal declaration and
application accepted
Public acknowledgement
of Signatory status
5 months
Figure 16.
Timeline for becoming a Signatory of the Sea Cargo Charter
Figure 16 details the steps to becoming a Signatory. The Sea Cargo Charter aims
to be easily implementable and achievable for each Signatory. To these ends,
the timetable for implementation in Figure 1 assists the Self-Assessment so that
Signatories know when there are important deadlines for alignment and reporting to
comply with the Sea Cargo Charter.
5.5 Governance
Information regarding the founding of the Sea Cargo Charter Association, the
selection of the Steering Committee, and the role of the Secretariat can be found in
the Governance Rules of the Association (available on the website).
47
4. How to become a Signatory Sea Cargo Charter
48
Appendices
Appendix Abbreviations 50
Appendix Glossary 51
Appendix List and guidance for particular cases 53
Definition of decarbonization trajectory

Appendix 54
and vessel continuous baselines
Worked examples for calculating

Appendix 61
climate alignments
Recommended charter party clause for

Appendix 65
voyage data reporting
49
Appendices Sea Cargo Charter - Technical Guidance
Appendix 1
CBM Cubic Meter
CDP Carbon Disclosure Project

a not-for-profit charity that runs a global disclosure system for investors, companies,
cities, states and regions to manage their environmental impacts.
DWT Deadweight Tonnes

a measure of how much weight a ship is designed to carry at maximum
summer draught
EEOI Energy Efficiency Operational Indicator

developed by the IMO in order to allow shipowners to measure the fuel efficiency of a
ship in operation. A carbon intensity metric calculated in accordance with Equation 1
as set out in Section 2.1 of the Technical Guidance.
EEDI Energy Efficiency Design Index

A design specification metric developed by the IMO.
FOB & DAP Free On Board & Delivered At Place

FOB and DAP are Incoterms (or International Commercial Terms), which are a series
of terms of trade for the sale of goods published by the International Chamber of
Commerce relating to international commercial law.
GHG Greenhouse Gas
GLEC Global Logistics Emissions Council

an industry-led partnership to drive emission reduction and enhance efficiency across
global logistics supply chains.
IMO International Maritime Organization

a specialized agency of the United Nations, and the global standard-setting authority
for the safety, security and environmental performance of international shipping.
IMO DCS IMO’s MARPOL Annex VI Data Collection System for Fuel Consumption
TC Time Charter
tnm Tonne-Nautical Mile
VC Voyage Charter
50
Appendix 2
Glossary
Activities not reported / Non-reporting percentage
If Signatories are unable to obtain data for voyages or if there are obvious errors
that can’t be corrected, these voyages are to be considered as activities eligible
for non-reporting. Percentage of chartering activities not reported (non-reporting
percentage) is to be calculated out of the total number of voyages and submitted to
the Secretariat in Step 4 of the information flow step (pages 34-35).
Ballast leg (also called ballast voyage) is a voyage that takes place between ports
of discharge and loading ports where the vessel is carrying no cargo and hence
takes on ballast (usually water) to make the vessel more manageable at sea. Ballast
legs may result from strategic decision-making by the (disponent) owner to ensure
the vessel is geographically well-placed to secure a higher rate for the subsequent
charter, or may result from a charterer requesting a particular vessel.
Bunkering is the supplying of fuel for use by ships.
Charterers are defined as the party who buys freight services from a (disponent)
owner under time or voyage charters.
Chartering activities are defined as business activities that are 1) on time and
voyage charters, including contracts of affreightment and parceling, with a
mechanism to allocate emissions from ballast voyages, and 2) for voyages carried
out by dry bulk carriers, chemical tankers, oil (crude and product) tankers and
LNG carriers, and 3) where a vessel or vessels are engaged in international trade
(excluding inland waterway trade).
Continuous baselines
In order to avoid bias against vessels due to their position within a vessel category
due to their size which could make alignment more challenging, continuous
baselines are introduced in the Sea Cargo Charter. This implies that the required
intensity is directly related to the size of the vessel through a power law relationship
similar to what is currently in place for the Energy Efficiency Design Index (EEDI).
Thus, each vessel type has an annual continuous baseline that defines required
carbon intensity which are defined in Appendix 4.
Decarbonization trajectory
A decarbonization trajectory is produced by the Secretariat based on agreed and
clearly-stated assumptions. The current decarbonization trajectory used by the Sea
Cargo Charter defines the rate of reduction of carbon intensity required to be aligned
with the IMO’s Initial Strategy absolute emission reduction ambition of at least 50%
by 2050 on 2008 levels.
The method used for establishing the decarbonization trajectory up to 2050 is
derived from emission and transport work data from the Fourth IMO GHG Study.
Disponent owner is a person or company that “displaces” or takes the place of the
legal, registered owner in charter parties. References to owner or shipowner include
the potential for a disponent owner to have taken their place and in this case to fulfil
the requirement.
51
Signatory is a charterer that has sent a formal declaration to the Sea Cargo Charter
Secretariat, has had that declaration accepted, and has had that declaration
announced.
Third party is a reputable service provider that is commissioned by the Signatory to

perform part of its obligations under the Sea Cargo Charter on its behalf.
Time charter is a contract for the hire of a named vessel from a (disponent)
owner, for a specified period of time for the charterer’s purposes subject to agreed
restrictions.
When on time charter, the (disponent) owner is responsible for the vessel’s running
expenses; the (disponent) owner operates the vessel technically, and the charterer
directs the ship’s commercial operations. Charterers pay a daily rate for a fixed time
period and all voyage costs including bunker.
Vessel type and size (vessel categories)

Carbon intensities vary as a function of ship type and size, as well as a ship’s
technical and operational specification. To enable the carbon intensity of ships to be
compared to a peer group of ships of a similar type and size, a classification system
is applied. The classification system is taken from the Fourth IMO GHG Study, to
enable consistency with the IMO’s process. Under the Sea Cargo Charter, Signatories
are required to report, among other, their vessel category climate alignments, which
categories are defined by vessel type and size. They can be found in Appendix 4.
Voyage charter is a contract for the transportation of a stated quantity by a stated

type of cargo on a named vessel between named ports against an agreed price.
On voyage charter, the charterer pays a transactional rate based on the amount of
cargo transported and the route. The (disponent) owner bears both the operational
costs and voyage costs. In this case, charterers do not have access to the actual
fuel consumption during the voyage and, in the case of vessels carrying multiple
cargos, the proportion of cargo each charterer has on board is unknown. Contracts of
affreightment and parceling fall under voyage charter operated under the same cost
regime.
• Contract of Affreightment is a contracting model that can be considered as
being an agreement for several voyage charters over a period of time which may
include parceling.
• Parceling is defined as when vessels are carrying cargo from various charterers at
the same time.
52
Appendix 3
List and guidance for particular cases
Particular cases
Ballast legs are included in each voyage by accounting for the CO2 emissions from the preceding ballast
Ballast legs leg while no transport work is carried out, noting that, as stated below, off-hire periods due to dry-dock-
ing are specifically excluded from the calculation.
Drifting periods, and associated emissions and distances, should be included in the overall duration of
Drifting periods
the voyage.
Floating storage/stationary time and related emission should be captured in the reporting without any
exemption if it is part of the charter. In case of a pure floating storage operation where EEOI/voyage
Floating storage /
alignment cannot be calculated on a voyage basis, the operations should still be captured at the aggre-
Stationary time
gated reporting levels (i.e. vessel category and annual activity alignment) by including the emissions in
the annual total.
Parceling operations are characterized by a vessel carrying multiple cargoes from various charterers.
Individual cargoes often remain on board through multiple port calls before being unloaded, while other
cargoes are loaded and unloaded in the interim. Within the Sea Cargo Charter, two separate situations
are considered:
• general parceling,
• chemical parceling.
For general parceling, all charterers with cargo onboard the vessel should use the carbon intensity for
the whole voyage, including the ballast leg, to calculate their voyage climate alignment and as input to
subsequent category and overall alignment calculations.
For chemical parceling, more detailed data collection is needed to collect data for the emissions that
Parceling occur in port. Climate alignment should be based on a carbon intensity value calculated for each parcel
as follows:
• total emissions for the parcel divided by the total transport work for the parcel
• total emissions for the parcel consist of its share of a prior ballast leg (if applicable) plus its share
of the emissions across all laden journey legs that the parcel is onboard plus its share of the port
call emissions
• the emissions associated with any ballast legs, which are uncommon in this subsector, will be
allocated to the cargoes on board on departure from the first port after the ballast leg in proportion
to their share of the transport work on the first subsequent journey leg
• the emissions associated with transportation are calculated on a leg by leg basis in proportion to
the parcel’s share of the total transport work, recognizing that this will vary as other cargoes are
loaded and unloaded during the voyage
• the emissions associated with a port call are allocated across all cargo that is unloaded, loaded
or transits through that port. This allocation is based solely on the mass share of each cargo com-
pared to the total (i.e. distance within port is set to zero)
• the total transport work for the parcel is the sum of its total transport work summed across all lad-
en journey legs that it remains on the vessel.
If a vessel leaves a port and then re-enters the same port (for example for tank cleaning or to free up a
berth while awaiting access to the next point of loading / unloading), this will be considered as part of
the same port call. Because vessels may spend considerable time in port, loading and unloading sever-
al cargoes, reporting of emissions for this subsector should be within 30 days of final cargo discharge.
Reporting may occur at the level of an individual parcel or per fixture, i.e., covering multiple parcels be-
longing to the same charterer, as agreed between the shipowner and the charterer.
The amount of fuel consumption relating to off-hire periods are to be included in the voyage’s overall
Off-hire period fuel consumption unless the vessel is off-hire due to dry-docking, pre-agreed or emergency mainte-
nance.
Voyages spanning
The voyage should be captured in the reporting period that it ends in.
multiple years
53
Appendices
Appendix 4
Definition of decarbonization trajectory and vessel

continuous baselines
The following describes the method applied for establishing an overall

decarbonization trajectory by defining the rate of decline of carbon intensity from
2012 out to 2050. The method used for establishing the decarbonization trajectory
up to 2050 is derived from emission and transport work data from the Fourth IMO
GHG Study.
Defining overall decarbonization trajectory:

The overall improvement required in carbon intensity is calculated from:
1. a projection of the foreseeable growth in transport work (in tonne-nautical
mile) across all ship types between baseline (2012) and the target year
(2050),
2. the target CO2 emissions in 2050 defined by the IMO Initial Strategy
absolute emission reduction ambition.
The projection of foreseeable growth is taken from the Fourth IMO GHG Study
scenario RP2.6 SSP2-L. This scenario is selected because it is most aligned with
decarbonization in the wider economy, and most closely represents the rate of GDP
and trade growth that has been observed in recent years.
The estimate of the target CO2 emissions in 2050 is taken by applying the IMO’s Initial
Strategy Objective 3 minimum target (at least a 50% reduction), to the IMO Initial
Strategy’s baseline year (2008) total CO2 emissions (921Mt), taken from the Fourth
IMO GHG Study. It should be noted that as indicated by the “at least”, this currently
represents the minimum level of ambition and therefore the maximum absolute
emissions and least ambitious aggregate carbon intensity. The estimate of 2012
emissions is taken from the Fourth IMO GHG Study.
Rounded values for the total transport demand, total CO2 emissions, and aggregate
carbon intensity in 2008, 2012 and 2050 are given in Table 5.
2008 2012 2050
Total transport demand (billion tonne nautical miles) 46,000 54,000 119,000
Total CO2 emissions (million tonnes) 921 848 461
Estimated aggregate carbon intensity (gCO2/tnm) 20.0 15.7 3.9
Table 5.
Transport demand, emissions, and carbon
intensity for international shipping
54
25.0
Carbon Intensity (gCO2/tnm) 20.0
15.0
10.0
5.0
0.0
2008 2012 2016 2020 2024 2028 2032 2036 2040 2044 2048 2052
Year
Figure 17.
Global decarbonization trajectory
Figure 17 plots the intensity values in Table 5 and a linear trend line connecting them.
There are many different assumptions that could be applied to specify the shape of
the curve that defines the rate of carbon intensity reduction between 2012 and 2050.
The chosen trajectory represents a gradual and consistent rate of improvement on
average across the fleet; the assumption applied here is for a constant improvement
year-on-year, which is described by a straight line between 2012 and 2050.
The trajectory exceeds the IMO Initial Strategy Objective 2 intensity reduction values
of 40% (2030) and 70% (2050), because it is derived to ensure achieving the IMO
Initial Strategy Objective 3 (the absolute emissions objective). Meeting Objective 3
ensures that all IMO Initial Strategy Objectives are achieved.
Ship type and size definitions:

Carbon intensities vary as a function of ship type and size, as well as a ship’s
technical and operational specification. To enable the carbon intensity of ships to
be compared to a peer group of ships of a similar type and size, a classification
system is applied. The classification system is taken from the Fourth IMO GHG Study,
to enable consistency with the IMO’s process. Full details of the definitions can be
found in that document. In the event that the IMO updates the classification system
used in future work, a decision on whether to update the classification system used
in the Sea Cargo Charter will be taken.
Estimating the ship type and size specific carbon intensity:

The Fourth IMO GHG Study contains a dataset estimating the carbon intensities
of individual ship types and sizes between 2012 and 2018. The dataset currently
provides the most up to date source of IMO-recognized information for the
calculation of decarbonization trajectories, but as more recent data becomes
available, the trajectories can be updated.
The most recent and the most accurate data in the publication is for the year 2018,
and therefore this is used as the historical data edge for subsequent steps of the
method.
55
Calculating the target carbon intensity in a given year as a

function of the ship type and size:
The rate of reduction required per year is relative to the last historical data point
(2012). The trajectory is shown relative to 2012 carbon intensity (indexed to 2012
carbon intensity) in Figure 18.
While the trajectory is presented for the time period 2012 to 2050, it is consistent
with the 2008 baseline year as specified in the IMO Initial Strategy Objectives as the
end point is determined by a 50% reduction relative to the baseline. The formula for
the trajectory is given in Figure 18, and allows the index value to be calculated for a
given year. The index value represents the required carbon intensity value relative to
the carbon intensity in 2012.
1.2
Indexed carbon intensity trajectory to 2012
1.0
0.8
0.6
0.4
0.2
y = -0.0198450665x + 40.9282738310
0.0
2000 2010 2020 2030 2040 2050 2060
Year
Figure 18.
Indexed decarbonization trajectory, from
2012 to 2050
56
Impact of stepped alignment baseline

A concern that has been raised by Signatories is the impact of discrete EEOI carbon
intensity benchmark values per ship type/size presenting a challenge for alignment
especially for vessels at the edges of existing vessel categories. To tackle this, a
continuous required carbon intensity baseline is introduced that avoids step changes
by creating a relationship with the vessels’ size.
Methodology
Continuous baselines are already widely used in maritime benchmarking such as
the International Maritime Organisation Maritime Environment Protection Committee
(IMO MEPC) Energy Efficiency Design Index (EEDI)20 and the more recent Carbon
Intensity Index (CII) regulation21.
Drawing on the above examples, a continuous baseline is fit through the required
carbon intensity median values for each ship type covered in the Sea Cargo Charter.
Figure 19 illustrates a stepped and a continuous baseline.
Bulk Carrier
60
Stepped baseline
50
Carbon Intensity (gCO2/tnm)
Continuous baseline
40
30
20
10
0
0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000
Deadweight
Figure 19.
Existing and proposed required carbon
intensity baseline for bulk carriers for 2021
20 MEPC, “Guidelines on the method of calculation of the attained energy efficiency design
index (EEDI) for new ships. MEPC.308(73),” MEPC 73/19/Add.1, 2018.
21 IMO, “Guidelines Supporting the CII Framework. Considerations on CII targets - ISWG-GHG
8/3/3,” IMO, London, 2021.
57
Appendices Sea Cargo Charter
To obtain the continuous baseline, a curve is fitted through a plot of the median
carbon intensity of each vessel size bin vs. the median vessel size in that bin. This is
based on data published in the Fourth IMO GHG Study22. This results in a power law fit
for the required carbon intensity values for 2021. Given the current ambition of the
Sea Cargo Charter to reduce carbon intensity in line with the minimum requirement
for IMO 2050 emission reduction ambition (at least 50% reduction by 2050 on 2008
levels23), a continuous curve is required for each year up to 2050.
The required carbon intensity can be expressed by the following expression:
Where rs is the required carbon intensity, Year is the year for which the carbon
intensity is required and Size is the size of the vessel in question in deadweight or
capacity. The coefficients a, b and c arising from the fitted curves can be found in
Table 6.
Vessel type a b c
Bulk Carrier -32.9076311594104 67868.3811973505 -0.4665737506683

Chemical tanker -59.6117239148686 122942.644606875 -0.4948044233852
Liquefied gas tanker -50.4814096569351 104112.372518699 -0.4207571821626
Oil Tanker -159.5594839048190 329073.9410821450000 -0.5543325979509
Table 6.
Coefficients for determination of required
carbon intensity for vessel types
22 J. Faber et al., “Fourth Greenhouse Gas Study 2020,” International Maritime Organization,
London, 2020.
23 IMO, “Initial IMO Strategy on reduction of GHG emissions from ships - MEPC.304(72) Annex 11,”
International Maritime Organization, London, 2018.
58
Figure 20 presents the proposed baselines for the vessel types covered by the Sea
Cargo Charter.
Bulk Carrier Chemical Tanker
60 90
80

50
70
40 60
50
30
40
20 30
20
10
10
0 0
0 100,000 200,000 300,000 400,000 0 20,000 40,000 60,000 80,000 100,000
Deadweight Deadweight
Stepped baseline Continuous baseline Stepped baseline Continuous baseline
Liquiefied gas carriers OilTanker
120 160
140
100
120
80
100
60 80
40 60
40
20
20
0 0
-25,000 25,000 75,000 125,000 175,000 225,000 275,000 -50,000 50,000 150,000 250,000 350,000 450,000
Capacity (cbm) Deadweight
Stepped baseline Continuous baseline Stepped baseline Continuous baseline
Figure 20.
Stepped and continuous carbon intensity
trajectory for vessels covered in SCC for
2021z
Example 3
Considering a typical 80,000 DWT Aframax tanker, the required carbon intensity in
2022 can be compiled as follows:
a = -159.56 Year = 2022
b = 329,073.94 Size = 80,000
c = -0.55
59
Continuous updating of trajectories as further data

becomes available:
Over the timescale that the decarbonization trajectories are estimated, a number of
the parameters that are used in their calculation may change. These include:
• The IMO may modify the Objectives, including when the IMO revises its
strategy (expected 2023) (e.g., if the Objectives increase in ambition, the
carbon intensity trajectory will steepen).
• Transport demand growth may develop differently to the estimate used
here to calculate the carbon intensity trend consistent with a 2050
absolute GHG objective (e.g., if demand growth exceeds the trend used in
these calculations, the carbon intensity objective will steepen).
• Demand growth may develop differently between ship types and increase
the demand for ships with different carbon intensity than the 2012 fleet
(e.g., if demand modifies the fleet composition to increase the share
of emissions by ships which have higher carbon intensity, the carbon
intensity objective will steepen).
• Utilization may differ from the values estimated for 2012, which will modify
the relationship between EEOI and mean the climate alignment trajectory
set using EEOI will need to be modified (e.g., if utilization reduces relative to
2012, the carbon intensity objective will steepen).
While the decarbonization trajectory and the ship continuous baselines for types
have been calculated using the best available data, there is a number of foreseeable
reasons why these values may need to change in the future. For this reason, it is
proposed that these are reviewed when new information becomes available. Any
update to these should be applied for future climate alignment, not re-analysis of
historical climate alignment.
60
Appendix 5
Worked examples for calculating

climate alignments
Bulk parceling example
The following example sets out how the principles of the approach can be applied to
bulk parceling operations.
The example concerns a voyage where the vessel or disponent owner charters space
on the vessel to two charterers who transport goods from different locations in South
America to two locations in Asia.
Calculations are made at the level of the single round trip because it is a one-off
journey within which all necessary information for quantification and reporting is
available from empty to empty. Both charterers, and the (disponent) owner, benefit
in terms of better overall efficiency from the presence of each other’s cargo.
The round trip consists of the following elements:

Ballast Leg Laden leg 1 Laden leg 2 Laden leg 3 Total
From: A (Asia) B (S. America) C (S. America) D (Asia)
To: B (S. America) C (S. America) D (Asia) A (Asia)
Distance (nm) 4085 787 6395 773
Total Freight (T) 0 39,369 56,855 17,486
Charterer A Freight (T) 0 39,369 39,369 0
Charterer B Freight (T) 17,486 17,486
Total Transport Activity (tnm) 0 30,993,522 363,601,847 13,520,492 408,115,861
Charterer A Activity (tnm) 0 30,993,522 251,774,533 0 282,768,055
Charterer B Activity (tnm) 0 0 111,827,313 13,520,492 125,347,806
Fuel (LFO) (T) 381.3 83.8 780.2 82.3 1327.5
Fuel (MGO) (T) 1.0 0.4 15.4 3.1 19.9
CO2 (LFO) (T) 1,201.4 263.9 2,458.4 259.2 4,182.9
CO2 (MGO) (T) 3.3 1.2 49.4 9.9 63.7
CO2 (Total) (T) 1,204.7 265.1 2,507.8 269.1 4,246.6
Overall emission intensity (gCO2e/tnm) 10.41
Table 7.
Characteristics of the bulk parceling example
The above is based on calculation of CO2 emissions using the values for MDO and
LFO in Appendix 6. The emission intensity value of 10.41 gCO2e/tnm is what would
be used by both charterers for their subsequent alignment calculations. Charterer A
would apply this for its transport activity of 282,768,055 tnm and Charterer B would
apply it for its transport activity of 125,347,806 tnm.
61
Chemical parceling example

The following example sets out how the principles of the approach can be applied to
chemical parceling operations.
The example shows how the emissions are assigned across the various charterers
with an interest in the cargo onboard. Because chemical parceling vessels can
spend significant periods of time in port, the vessel emissions that occur when the
ship is in port are specifically included in the assignment process in the same way
that ballast leg emissions so that the emissions assigned across all customers are
the same as the total emissions calculated for the whole journey.
The example is based on an extract from a continuous journey, where freight

belonging to Brown LLP is already on board at Port A as the example starts and
freight belonging to Cork Ltd and Evans GmbH remains on board as it prepares to
leave Port F. Cargoes are continuously loaded and loaded as the vessel travels
between intermediate ports.
The trip and operational characteristics are as follows:
Fuel (t) Freight amount per charterer (t)

Distance
(nm)
Location MGO LFO Adams Inc Brown LLP Cork Ltd Davis Int'l Evans GmbH
Port A 78.7 0 > 3,430 2,100 0 > 3,771 0 0

At sea 41.6 713 3,430 2,100 3,771 0 0
Port B 42.1 3,430 2,100 3,771 > 0 0 > 1,798 0
At sea 38.5 687 3,430 2,100 0 1,798 0
Port C 156.2 3,430 > 12,312 2,100 > 12000 0 > 9,094 1,798 > 14,110 0
At sea 441.1 9314 12,312 12,000 9,094 14,110 0
Port D 20.1 12,312 12,000 9,094 14,110 > 7,473 0
At sea 85.1 1792 12,312 12,000 9,094 7,473 0
Port E 135.5 12,312 > 5714 12,000 > 0 9,094 > 6,152 7,473 > 0 0
At sea 62.9 1102 5,714 0 6,152 0 0
Port F 5,714 > 0 0 6,152 0 0 > 20,000
x > y indicates a loading operation in port where x is the original value and y is the final value.
Table 8.
Characteristics for the chemical parceling
example
62
CO2 (LFO) (t) CO2 (MGO) (t) CO2 (Total) (t)

Port A 252.3 0 252.3
At sea 133.4 0 133.4
Port B 135.0 0 135.0
At sea 123.4 0 123.4
Port C 500.8 0 500.8
At sea 0 1,389.9 1,389.9
Port D 0 63.3 63.3
At sea 0 268.2 268.2
Port E 0 427.0 427.0
At sea 0 198.2 198.2
Port F 0 144.9 144.9
Table 9.
Emission totals by leg of journey
The CO2 emission calculation uses the emission factors for MDO and LFO in Appendix 6
and the amount of fuel used from the operational characteristics table above.
Adams Inc Brown LLP Cork Ltd Davis Int'l Evans GmbH Total
Port A (t) 3,430 2,100 3,771 0 9,301
At sea (tnm) 2,445,590 1,497,300 2,688,723 0 0 6,631,613
Port B (t) 3,430 2,100 3,771 1,798 11,099
At sea (tnm) 2,356,410 1,442,700 0 1,235,226 0 5,034,336
Port C (t) 12,312 12,000 9,094 14,110 47,516
At sea (tnm) 114,673,968 111,768,000 84,701,516 131,420,540 0 442,564,024
Port D (t) 12,312 12,000 9,094 14,110 47,516
At sea (tnm) 22,063,104 21,504,000 16,296,448 13,391,616 0 73,255,168
Port E (t) 12,312 12,000 9,094 7,473 40,879
At sea (tnm) 6,296,828 0 6,779,504 0 0 13,076,332
Port F (t) 5,714 0 6,152 0 20,000 31,866
Table 10.
Values used for assignment of emissions by
charterer and leg of journey
Adams Inc Brown LLP Cork Ltd Davis Int'l Evans GmbH
Port A 36.9% 22.6% 40.5% - -
At sea 36.9% 22.6% 40.5% - -
Port B 30.9% 18.9% 34.0% 16.2% -
At sea 46.8% 28.7% - 24.5% -
Port C 25.9% 25.3% 19.1% 29.7% -
At sea 25.9% 25.3% 19.1% 29.7% -
Port D 25.9% 25.3% 19.1% 29.7% -
At sea 30.1% 29.4% 22.2% 18.3% -
Port E 30.1% 29.4% 22.2% 18.3% -
At sea 48.2% - 51.8% - -
Port F 17.9% - 19.3% - 62.8%
Table 11.
Assignment percentages by charterer and
leg of journey
63
t CO2 Adams Inc Brown LLP Cork Ltd Davis Int'l Evans GmbH
Port A 93.0 57.0 102.3 0 0
At sea 49.2 30.1 54.1 0 0
Port B 41.7 25.5 45.9 21.9 0
At sea 57.8 35.4 0 30.3 0
Port C 129.8 126.5 95.8 148.7 0
At sea 360.1 351.0 266.0 412.7 0
Port D 16.4 16.0 12.1 18.8 0
At sea 80.8 78.7 59.7 49.0 0
Port E 128.6 125.3 95.0 78.1 0
At sea 95.4 0 102.8 0 0
Port F 26.0 0 28.0 0 91.0
Table 12.
Emissions by charterer and leg of journey
Sample calculation for Adams Inc, whose freight is first loaded at Port A and finally unloaded at
Port F:
• Total CO2 emission for Adams Inc is the total of their share for all port and journey legs their
cargo is on board, which is actually all of the above = 93.0+49.2+41.7+57.8+129.8+360.1+16
.4+80.8+128.6+95.4+26.0 = 1,078.8 t
• Total transport activity is the sum of their share of the transport work for journey legs = 2,4
45,590+2,356,410+114,673,968+22,063,104+6,296,828 = 147,835,900 tnm
• The emission intensity for Adams Inc while their cargo is on board = 7.30 gCO2e/tnm
• The value of 7.30 gCO2e/tnm is what would be used by both charterers for their subsequent
alignment calculations. Adams Inc would apply this for its transport activity of 147,835,900
tnm
Because Brown LLP’s cargo is already on board, we would need to know about prior journey legs to
perform their calculation.
There are two separate calculations for Cork Ltd. For the cargo loaded at Port A and off loaded at Port B:
• Total CO2 emissions = 3,771+2,688,723+3,771 = 202.2 t
• Total transport activity = 2,688,723 tnm
• The emission intensity for this parcel is 75.20 gCO2e/tnm
• Cork Ltd’s cargo loaded at Port C remains on board after Port F meaning we would need to
know about subsequent journey legs to perform the calculation for this cargo.
Davis Int’l has cargo loaded at Port B that is fully offloaded by departure at Port E.
Total CO2 emissions = 21.9+30.3+148.7+412.7+18.8+49.0+78.1 = 759.5 t
Total transport activity = 1,235,226+131,420,540+13,391,616 = 146,047,382 tnm
The emission intensity for this parcel is 5.20 gCO2e/tnm
64
Appendix 6
Recommended charter party clause for voyage

data reporting
In order to ensure consistent and complete data collection by Signatories of the Sea
Cargo Charter, a recommended charter party clause for voyage data reporting has
been developed. The basis for this approach is set out in the following paragraphs
and the recommended charter party clause itself — the Sea Cargo Charter Clause —
is available on the website.24
In entering into charterparties envisaging carriage of goods by sea, Signatories

shall use their best endeavors to incorporate into contracts with their contractual
counterparties (head-owner or disponent owner) a contractual provision requiring
the head owner or disponent owner to provide the information set out in the Sea
Cargo Charter Clause — the recommended charter party clause — for voyage data
reporting within a reasonable time from the end of the performance of the relevant
contract alternatively on a monthly basis. To support data collection, various Data
Collection Templates have been developed and can be found in the Sea Cargo
Charter Clause on the website.
Such information shall be provided by the owner or the disponent owner to the
Signatory or a Third party designated by the Signatory solely for the purpose of
calculating the EEOI and associated climate alignment.
Recognizing the wide variety of contracts, the Signatory and the contractual
counterparty shall decide on the mechanism for incorporation into the contract, and
the wording in the Sea Cargo Charter Clause is an example of a provision that may be
appropriate.
Bunker emission factors:
In order to calculate the CO2 emissions associated with the combustion of fuels,
emission factors are found in MEPC.308(73). As alternative fuels become more
commonplace in the market, a provision for reporting “other fuels” in the Sea
Cargo Charter Clause’s Data Collection Templates is included. Due to the absence
of emission factors for these fuels provided by the IMO, the fuel map below should
be used to determine the appropriate carbon factor to be used to calculate voyage
carbon intensity as per Equation 1.
24 The Sea Cargo Charter Clause is available here: https://www.seacargocharter.org/resources/
65
Acknowledgements Sea Cargo Charter - Technical Guidance
Reported Fuel Reference Matched fuel Carbon factor

(tCO2/tfuel)
MGO/MDO ISO 8217 Grades DMX through DMB 3.206

Light Fuel Oil (LFO) ISO 8217 Grades RMA through RMD 3.151
Conventional Fuels
Heavy Fuel Oil (HFO/VLSFO) ISO 8217 Grades RME through RMK 3.114
Liquefied Petroleum Gas (LPG) Propane 3.000
Liquefied Petroleum Gas (LPG) Butane 3.030
Liquefied Natural Gas (LNG) 2.750
Methanol 1.375
Ethanol 1.913
Bio-methanol Methanol 1.375
e-methanol Methanol 1.375
Bio-gasoil MGO/MDO 3.206
Alternative Fuels
e-gasoil MGO/MDO 3.206

e-LNG LNG 2.75
Hydrogen (from natural gas) n/a n/a
e-Hydrogen n/a n/a
Ammonia (from natural gas) n/a n/a
e-Ammonia n/a n/a
Electricity n/a n/a
Table 7.
Fuel carbon factors for conventional and
alternative fuels
These carbon factors are only a provisional option until a widely agreed set of carbon
factors is put in place by the IMO which will ideally capture all GHG species and
lifecycle emissions.
66
Acknowledgements
The Sea Cargo Charter was developed in an effort spearheaded by leading industry
players – charterers and ship owners – as well as the Global Maritime Forum, Smart
Freight Centre, and University College London Energy Institute/UMAS.
Project team
Global Maritime Forum

Johannah Christensen, Managing Director, Head of Projects & Programmes
Louise Dobler, Project Manager
Smart Freight Centre

Alan Lewis, Technical Development Director
University College London/UMAS

Jean-Marc Bonello, Consultant, UMAS
Tristan Smith, Reader in Energy and Shipping, University College London
Drafting group
Jan Dieleman, President, Cargill Ocean Transportation (Chair)

Andrew Barker, Global Operations and Sustainability Lead,
Cargill Ocean Transportation
Peter Lye, Global Head of Shipping, Anglo American
Capt. Raghav Gulati, Safety and Technical Operations Manager - Shipping,
Anglo American
Lance Nunez, Marine and Terminal Logistics Director, Dow Chemical
Hugo De Stoop, Chief Executive Officer, Euronav
Christof Van de Gaer, Head of Chartering, Euronav
Jan Rindbo, Chief Executive Officer, Norden
Henrik Røjel, Head of Fuel Efficiency and Decarbonisation, Norden
Erik Hånell, President and Chief Executive Officer, Stena Bulk
Vishnu Prakash, Head of Data Science, Stena Bulk
Luc Gillet, Senior Vice President Shipping, Total Trading & Shipping
Sebastien Roche, General Manager, Technical Department, Total Trading & Shipping
Richard Head, Head of Health, Safety, Environment and Communities, Trafigura
Matthew Shorts, Health Safety Environment and Community Manager, Trafigura
Haris Zografakis, Partner, Stephenson Harwood
67
Additional support
Peter Appel, Partner, Gorrissen Federspiel

Morten Berggreen, Managing Counsel, Gorrissen Federspiel
Bethanie John Esq., Legal Consultant, Gorrissen Federspiel
Michael Parker, Chairman, Global Shipping, Logistics & Offshore, Citi & Chair,
Poseidon Principles Association
Michael Søsted, Managing Director, Head of Operations, Global Maritime Forum
Torben Vemmelund, Head of Communications, Global Maritime Forum
Elyse Lawson, Project Manager, Global Maritime Forum
Tina Maver, Project Manager, Global Maritime Forum
Layout by Housatonic.eu
68
69
Sea Cargo Charter
Amaliegade 33 B, 3rd floor
1256 Copenhagen K
Denmark
[email protected]
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Aligning global shipping

with society’s goals

Sea Cargo Charter

© Sea Cargo Charter

The Sea Cargo Charter

Jan Dieleman Richard Head Peter Lye

Jan Rindbo Lance Nunez Luc Gillet

As Signatories, we commit to implementing the Sea Cargo Charter in our internal

1. on time or voyage charters, including contracts of affreightment and parceling,

As to choice of reporting segments:

• SEGMENT 2 – Charterparties where the Signatory is the voyage charterer.

• SEGMENT 3 – Charterparties where the Signatory is an intermediate time

• SEGMENT 4 – Owned vessels: if, in addition to being a charterer on certain

As to minimum reporting requirements:

• Segment 3 is optional. If a Signatory chooses to report within this segment,

• Segment 4 is optional and is only open to Signatories who are also

We will annually assess climate alignment in line

We recognize the important role that verification

We will ensure ongoing compliance with the Sea

We will publicly acknowledge that we are a

1. Upon becoming a Signatory, the Signatory will

2.1 Selecting the right metric 17

Transparency 4.1 Information flow 41

5.1 Standard Declaration 45

The purpose of the Technical Guidance is to clearly state the requirements

Calculation of Climate Alignment

Starting in the next calendar year

We will annually assess climate alignment in line

Signatories will, on an annual basis, calculate the GHG

1. To reduce the total annual GHG emissions by at least 50% by 2050

800 100% CO2 Reduction

40% by 2030 Business as Usual

IMO 50% CO2 by 2050

15 70% by 2050 IMO CO2 Intensity Targets

70% CO2 Reduction

2.1 Selecting the right metric

Both absolute and intensity-level measurements of GHG emissions are useful to

In shipping, carbon intensity represents the total operational emissions generated

While there is no standardized method of operational data collection, the most

6 See Appendix 3 for guidance on particular cases.

2.2 Sourcing of data

7 Bareboat charter can be considered a special case of TC.

2.3 Assessing climate alignment

A decarbonization trajectory is a representation of how many grams of CO2 can

2.4 Decarbonization trajectory

A decarbonization trajectory is produced by the Secretariat of the Sea Cargo Charter

2.5 Aggregating alignment at the vessel category level

Example 1 on the next page shows a simple calculation of climate alignment.

Steps for calculating climate alignment by vessel category:

where ∆j is the category activity alignment for Nj voyages by vessels in category j

Steps for calculating climate alignment of total annual activity:

Vessel type Vessel size category Size Units

Example 1: Calculating alignment at the category level

In this example, a Signatory measures its climate alignment for 2022.

Bulk Carrier 3 2022 186.3 1,890 10.1 8.3 21.6

Year Transport Work (Mtnm) CO2 (t) Alignment Delta (%)

2022 3,976.5 24,090.0 -14.4

We recognize the important role that verification

For each step in the assessment of climate alignment,

We will ensure ongoing compliance with the Sea