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Retrofitting ships and digital optimisation can cut carbon emissions by 20% today

A recent webinar presented by Seatrade Maritime News focused on sustainable financing and its role in supporting shipping’s future. Two prominent bankers, an assurance specialist and an energy saving device manufacturer discussed new strategies for procuring finance.

The pressure is on, not only for new vessels, but also for the many thousands of existing ships which must become far more carbon-efficient by the end of the decade, attendees at the webinar heard. Bank presenters included Logan Chong, Head of Shipping & Offshore for BNP Paribas in Greater China, and Gene Sullivan, Principal Investment Officer at Washington-based International Finance Corp (IFC), part of the World Bank.  

They were joined by Norsepower CEO & Partner, Tuomas Riski, and Dr Jan-Henrik Hübner, Global Head of Shipping Advisory at DNV Maritime which offers third-party assessments of project sustainability. The session was moderated by Seatrade Maritime News Editor, Marcus Hand. The webinar was hosted by the Hong Kong Maritime and Port Board as part of Hong Kong Maritime Week, and presented by Seatrade Maritime News.

Riski revealed that his company has now installed 14 Rotor Sails on seven ships with proven fuel savings of about 8%. However, by adopting wind power together with other existing retrofit technologies, that figure could be increased to around 20%, he said. Savings like this will become increasing important, he pointed out, because the cost of shipping’s future fuels is likely to be so much higher.

BNP Paribas’ Chong revealed that the bank has two channels for sustainability-linked projects – one is ‘green-able; one is transition-able’, he said, giving the example of an LNG-fuelled vessel that might qualify for transition-related funding but which may not be eligible for green finance. An analysis of a potential client’s CSR framework has become a much more important part of the corporate assessment process, Chong explained.  

Watch the full webinar on demand now 

DNV’s Hübner noted that standards for sustainability-linked financing structures are developing fast and also outlined the difference between ‘green’ finance, usually asset-related, and sustainable or transition funding, which tends to focus on corporate borrowers and their relevant commitments. This means, for example, that ships engaged in the carriage of fossil fuels are not eligible for green finance but could be part of a sustainable finance package.

Hübner also noted the requirement for careful appraisal, both of new ships and retrofit projects. Most shipowners like to make claims about their ships’ green features, he said, but experience and some ‘problematic cases in the past’ have raised concerns that ‘green-washing’ can sometimes cloud the picture.

External verification would be required to assess the commitment of the corporate and the quality of its ‘green’ project. About two-thirds of cases are clear, Hübner said, but about a third could be considered as ‘borderline’ requiring more careful appraisal.

Triple A-rated IFC is the largest global development finance institution focused on the private sector, the IFC’s Sullivan said, with about $100bn in assets. Although IFC has not traditionally been notably active in international shipping, it is now more engaged as part of the sector’s decarbonisation programme, as well as in financing vessels serving emerging markets as part of international shipping routes. IFC is also closely involved in domestic shipping in emerging markets, in port infrastructure, and in inland logistics.

Sullivan shared that the bank signed a $100m deal with a leading private sector Chinese shipping company in September, providing a facility to enable the diversion of cargo flows from trucks to more efficient ships on a number of the country’s domestic routes, which reduces the GHG footprint of these flows.

IFC is also preparing to work with governments, local authorities, ports and terminals to prepare the ground for new low- or zero-carbon fuels to be introduced as they become available, he said, so that the necessary shore-side infrastructure can enable new fuel supply chains to be established.  

You can watch to the full webinar on demand now