The challenges of green ship finance

According to the IMO's Revised Initial GHG (greenhouse gas) Strategy, international shipping is to reduce its GHG emissions to net zero "by or around, ie close to, 2050".1The three main pillars of this strategy are energy efficiency measures, a technical measure prescribing increasingly less polluting fuels, and an economic measure that puts a price on GHG emissions. The first pillar is underway; the latter two are in negotiation and it is hoped that they will be implemented in the autumn of 2025.

To comply, shipowners will need to deploy more efficient vessels which can also use new, low- and zero-emission fuels. However, the use of such solutions, whether in newbuilds or via retrofitting, is a significant expenditure and the question arises how this expense will be financed.