Sustainable Ship Finance

Ship financing in the EU has become more challenging, with Asian financial institutions gaining market share. EU shipping, being a capital-intensive business, requires a sustainable financing framework and access to competitive financing to maintain and advance its competitive edge globally.

If the EU introduces too restrictive conditions for ship finance, which will apply only regionally, it will immediately place its own fleet at a disadvantage compared to the fleets of the rest of the world and this would be a geopolitical mistake.

EU Taxonomy Regulation

Despite the EU Taxonomy Regulation’s13 laudable objectives, the technical screening criteria, developed by the EC to define green shipping, are inappropriate and suggest a limited understanding of the shipping industry’s specificities and inherent characteristics, especially those pertaining to deep sea shipping. This is evidenced by the arbitrary use of thresholds on the IMO’s Energy Efficiency Design Index (EEDI) that go beyond IMO requirements, but especially by the exclusion of vessels dedicated to transport fossil fuels.

The EU taxonomy also does not acknowledge technologies and fuels that contribute to the transition to climate neutrality, such as Liquefied Natural Gas (LNG). This is especially concerning given that zero-carbon fuels and propulsion technologies are currently not available for the sector and cannot be developed by shipping companies but rather by other out- of-sector stakeholders, such as fuel producers and providers, marine engine builders and shipyards. More time is needed for a more fine-tuned and realistic iteration of the technical screening criteria for all ocean-going cargo ships.

The EU institutions should consider the adoption of stable and sustainable financing regulations in order to strengthen shipping companies’ presence in Europe, which in turn ensures that the related added value will also remain in Europe.

13 Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088