UK Trends and Developments Contributed by: Quentin Bargate and Elliot Bishop, Bargate Murray
payment routes, currency substitution, and the steps required to “overcome” banking friction. Payment mechanics are no longer boilerplate. Issues that used to be treated as administrative – remitting bank, intermediary banks, timing, documentation and compliance narratives – now regularly decide whether a transaction can proceed. More parties are building in: • agreed fallbacks (alternative banks, escrow struc - tures, alternative currencies); • escalation procedures and time-bound co-opera - tion obligations; and • express consequences if a proposed alternative is not acceptable (including whether time continues to count and who bears resulting costs). Evidence wins cases. Where a party says “we could not pay” or “we could not call”, tribunals will scru - tinise contemporaneous records: bank correspond - ence, compliance decisions, voyage orders, under - writer positions, and internal minutes. Parties who build simple evidential requirements into their clauses (what must be produced, by when) tend to reduce the temperature of disputes. Decarbonisation: carbon cost has moved from policy to cash By 2026, decarbonisation is not a reputational conver - sation; it is a pricing, financing and contractual alloca - tion problem. At international level, the International Maritime Organization (IMO) has continued to push towards an industry-wide framework that combines fuel stand - ards with greenhouse gas pricing mechanisms. In April 2025, the IMO announced approval of draft “net- zero” regulations intended to introduce a mandatory marine fuel standard and a global GHG emissions pricing mechanism. Even in draft form, this influences investment decisions and contract negotiations, as it signals direction and future compliance costs. The key commercial reality is that carbon exposure now behaves like a voyage cost: it can be measured, priced, allocated and disputed. The harder part is
aligning contractual responsibility with operational control (speed, routing, fuel choice, port time). EU Emissions Trading System (ETS) in practice: where the money and disputes sit in 2026 For many trades, EU ETS exposure is now the most immediate carbon cost driver. Scope basics (that matter commercially) The EU ETS extension covers large ships (5,000 GT and above) and captures: • 100% of emissions on voyages and port calls within the EU/EEA; and • 50% of emissions on voyages into or out of the EU/EEA. Phase-in and greenhouse gas scope The surrender obligation is being phased in: com - panies were required to surrender allowances cov - ering 40% of verified 2024 emissions in 2025, and are required to surrender allowances covering 70% of verified 2025 emissions in 2026, and 100% thereaf - ter. The scheme also expands beyond CO₂: methane (CH₄) and nitrous oxide (N₂O) fall within scope from 2026, which is material for liquefied natural gas (LNG) and certain other trades. Where disputes arise The recurring friction points are: • who is the “shipping company” with legal responsi - bility under the regime versus who bears economic cost under the charter; • emissions data integrity (monitoring, reporting and verification processes, third-party verification, and audit trails); • timing mismatches (voyage performed now, surren - der/payment obligations later); and • allocation where there is mixed trading (EU and non-EU legs) or redirection mid-voyage. Contracting response Market participants continue to use specialist ETS clauses and bespoke “carbon pass-through” drafting. The commercial objective is to prevent the ETS cost becoming a retrospective argument after performance
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