Shifting currents in ship finance
In its Q4 State of Ship Finance Report, Hamburg-based Oceanis highlights significant trends in green shipping finance. It notes that green financing is primarily beneficial for new and modern vessels, often excluding smaller shipowners with older fleets. There is a lack of consensus among financiers regarding what qualifies as 'green', creating ambiguity for shipowners.
Recent increases in base rates have reduced the cost advantage of green loans from banks aligned with the Poseidon Principles. Despite shipping being an eco-friendly transport mode, the industry's shift towards greener practices is crucial due to its significant greenhouse gas emissions.
he Poseidon Principles initiative is leading the way in green finance, managing a substantial portion of global shipping loans. However, there's a debate over whether a ship's 'greenness' should be determined by its emissions or the environmental impact of its cargo. Upcoming EU regulations will require most banks to disclose their loan portfolios' emissions, possibly leading to mandated emission reductions.
Commercial banks have become a more viable option for shipowners with less focus on green initiatives due to the narrowed cost difference with Poseidon Principles banks. The report also covers sector-specific trends in dry bulk and tanker financing, noting changes in ownership patterns and financing strategies in response to market conditions and regulatory shifts. (pb)