Financing of low-carbon technology projects

Abstract

The need to decarbonize maritime transport is affirmed in all recent policy documents and instruments. Decarbonization implies the installation of technologies that reduce consumption or do not use fuels that emit carbon dioxide. This technology evolution results in higher acquisition prices for the new assets, a premium that currently is absorbed by the owners, as there is no sign in the market for higher freights for greener services and a global carbon tax is not yet imposed. In addition, regulation is still under development, and the capital is either limited or more expensive than in the past. Hence, the financing of green ships is a challenging task, and financial engineering, such as shared economy models, credit facilities, and subventios, is required. Moreover, investors and shipowners should consider EU Taxonomy and ESG investing criteria that validate the green character of the projects insinuating higher standards of transparency, accountability, and reporting.

Keywords Financing greening; Green shipping