Regulation (EU) 2023/1805 of the European Parliament and of the Council of 13 September 2023 on the use of renewable fuels and low-carbon fuels for maritime transport and amending Directive 2009/16/EC  represents a milestone in the transition towards more sustainable shipping in the European Union. In force since 12 October of the same year and applicable as of 1 January 2025, this regulation establishes new rules to promote the use of renewable and low-emission fuels in shipping within the EU. Its purpose is clear: to reduce greenhouse gas emissions and move towards the climate commitments of the ‘European Green Pact’ which aims to create a climate-neutral Europe by transforming the way we produce and consume.

Maritime transport, which plays a key role in the global and European economy as it handles 75% of the EU’s external trade and 31% of internal trade, has a very significant environmental impact, accounting for 3-4% of total CO2 emissions in the region.

Faced with this challenge, Regulation (EU) 2023/1805 outlines a roadmap for the decarbonisation of the sector, driving the transition to cleaner energy sources. This initiative will not only reduce pollution but also ensure the competitiveness and sustainability of maritime transport in Europe.

The Regulation lays down specific rules to reduce the greenhouse gas intensity of fuels used in maritime transport. One of its main features is that it applies to ships with a gross tonnage of more than 5,000 tonnes operating in EU ports, irrespective of their country of origin or destination. In addition, progressive emission reduction targets are set, starting at 2% from 01 January 2025 and gradually increasing to 80% by 2050 (1). To achieve this, it calls for the use of renewable and low-carbon fuels such as advanced biofuels, hydrogen, green ammonia and electricity. It also promotes the use of wind-assisted propulsion as a viable alternative.

That said, one of the key elements of the regulation is the obligation to use electricity in ports. From 2030, container and passenger ships will have to be connected to the electricity grid at the quayside to avoid the use of combustion engines while in port. This measure will significantly reduce air pollution in coastal cities and improve air quality for local residents.

The implementation of Regulation (EU) 2023/1805 will have a positive impact on the reduction of pollutant emissions in maritime transport. This legislation is expected to drive innovation in propulsion technologies and encourage the development of more sustainable fuels, consolidating Europe’s leadership in green solutions for the maritime sector.

However, it also presents challenges, especially in economic terms. Shipping companies will have to invest heavily to adapt their fleets to meet the new standards. In addition, the development of adequate port infrastructures to ensure the supply of alternative fuels and the implementation of efficient electrical systems will be crucial.

Sanctions and enforcement systems: To ensure compliance with the regulation, a penalty system known as FuelEU will be implemented, which will penalise ship operators that fail to meet emission reduction targets. In addition, compensation between vessels within the same company will be allowed to balance compliance levels and facilitate a more flexible transition to clean fuels.

In conclusion, Regulation (EU) 2023/1805 marks a turning point in the regulation of maritime transport in the European Union. With these measures, the EU reaffirms its commitment to the fight against climate change and its leadership in promoting sustainable solutions for global transport, a clear example of commitment to future generations and the planet.

The effective implementation of this regulation will undoubtedly depend on the joint efforts of authorities, companies and operators in the maritime sector, who will have to adapt to this new era of green and responsible shipping and, although the transition to a more sustainable maritime industry involves challenges in terms of costs and technological adaptation, the long-term environmental and economic benefits are unquestionable.

(1) The regulation sets concrete targets compared to 2020 levels: 2% less in 2025, 6% in 2030, 14.5% in 2035, 31% in 2040, 62% in 2045 and 80% in 2050.

It is common practice in the international maritime transport of goods for shipping lines to offer their own general conditions of contract, and for the rest of the actors in the sector to adhere to them. Therefore, the consignees, receivers of the goods carried under the bill of lading (B/L), do not in practice have the capacity to negotiate the terms of these documents; but by acquiring the bill of lading, they succeed to the shipper’s rights and obligations. The clauses conferring jurisdiction to resolve possible disputes that may arise between the parties are also included in these general conditions.

Law 14/2014, of 24 July, on Maritime Navigation (LMN), has tried to protect these consignees by drafting articles 251 and 468 of the LMN. Article 251 of the LMN provides that the acquirer of the bill of lading is also the acquirer of all the rights and actions of the transferor over the goods, except for those referring to jurisdiction and arbitration agreements, which should be adjusted to the provisions of Article 468 LMN, which establishes that clauses of submission to foreign jurisdiction or arbitration abroad that have not been negotiated individually or separately will be null and void.

This is the issue raised in our post ‘Scope of the international jurisdiction clause in Bills of Lading’ of 14 May 2024. Following the judgment of 25 April 2024 of the Court of Justice of the European Union (CJEU) in cases C-345/22 to C-347/22, resolving the questions referred to in a preliminary ruling by the Provincial Court of Pontevedra, it is now the turn of the mentioned court to deliver its judgment.

Since the adoption of the LMN, the Provincial Courts have interpreted differently the reference made by the CJEU in the case of ‘Coreck Maritime GmbH v Handelsveem BV and others (C-387/98)’ to the ‘applicable national law’ of the State hearing the dispute in relation to the enforceability of these clauses against third parties:

• The law governing the substantive validity of the jurisdiction agreement, which according to Article 25(1) of the Brussels I bis Regulation is the law of the State whose courts have been designated by the parties, including the rules of private international law (cf. Article 20 of the Regulation).

• The national law which, according to the rules of private international law of the forum, governs the legal relationship whose succession is in dispute.

• The lex fori (the domestic law of the State before whose courts the action is brought).

In this respect, and as the CJEU did in its response to the questions raised, the Provincial Court of Pontevedra is clear in stating that ‘when Community case law refers to domestic law to judge on the transfer of rights in the security, that domestic rule is not necessarily Art. 251 LMN, but the reference must be understood as being made to the rules of private international law’. Therefore, according to the Provincial Court of Pontevedra in its ruling, we must look for the applicable conflict rule. In accordance with the facts in dispute, whether applying the Rome I Regulation or art.10.3 Spanish Civil Code (even in application of arts. 100, 102 and 165 of Law 19/1985 of 16 July 1985 on Exchange and Cheque), conflict rules lead to the same point, and not to Spanish law; in the contested case it would be Peruvian substantive law that would be applicable to the enforceability of these clauses. However, in these cases, the parties did not prove the content and validity of the foreign law, so the court understood that it should refer to domestic law according to the general rules contained in art.33.3 of Law 29/2015, of 30 July on International Legal Cooperation in Civil Matters. It is thanks to the lack of proof of foreign law that the Provincial Court of Pontevedra applies the Maritime Navigation Act. This was essential for the Court of Justice of the European Union to be able to rule on the second question, i.e. whether inserting additional validity requirements for the effectiveness of jurisdiction clauses in bills of lading is contrary to the Brussels I bis Regulation.

And in this sense, the Provincial Court of Pontevedra upholds the thesis of the CJEU, when it rules: the principle of the primacy of EU law makes it necessary to invalidate the last paragraph of the provision, which provides for an exception to full subrogation in respect of jurisdiction and arbitration clauses. Excluding that rule, Community legislation and case law must be applied, which admits the provision of the plaintiff’s consent in the form in which it is set out in the title (cf. art. 35.1 [sic] of the Brussels I bis Regulation), thereby overriding the requirement that the recipient addressee, holder of the knowledge, express its consent individually and separately’. In other words, EU Member States cannot add in their substantive law additional requirements to those foreseen by Art. 25(1) of the Brussels I bis Regulation.

Thus, the Provincial Court of Pontevedra affirms the effectiveness against third parties of the clauses conferring jurisdiction contained in the B/L and declares the lack of jurisdiction of the Spanish courts to hear the dispute, in favour of the court of the United Kingdom specified in the clause. Therefore, the clause will be enforceable against the third party holder of the B/L provided that it has been recognised as valid in the relationship between the shipper and the carrier that concluded the contract and that the third party has been subrogated to all the rights and obligations of one of these original parties, in accordance with the applicable national law, determined by virtue of the rules of private international law of the Member State hearing the dispute. Where the clause grants jurisdiction to the courts of an EU state, the manner in which consent is given is not governed by national law as long as it departs from the formal and substantive validity requirements of Art. 25 BIT-bis).  The LMN, as currently drafted, will only become operational when the Brussels I bis Regulation or an international treaty standard does not apply.

The resolution of the question undoubtedly limits the application of Article 251 of the LMN.

In the case at hand, which occurred in pre-Brexit times, the UK was still a member state of the EU, so the form of consent was that of Art.25 RBI-bis, as it is to any jurisdiction clause in favour of European courts. However, after Brexit, the jurisdiction clause in favour of UK courts, which is very common, would no longer be subject to the aforementioned European regulation and could therefore be subject to the regime of the Maritime Navigation Act. Without its individual and separate negotiation it would not be recognised, like any other clause in favour of non-European courts or arbitration clauses.