Ports Providing Financial Incentives for Green Vessels
Ports are increasingly taking steps to support the decarbonization of shipping. In addition to the initiatives looking at the formation of green shipping corridors, individual ports are introducing green incentives providing incentives for ships that meet emission standards or employ alternative green fuels to reduce emissions.
The Maritime and Port Authority of Singapore announced as of May 1, 2022, that it was introducing enhancements to its Green Port Program to encourage environmental sustainability among ocean-going vessels calling at the Port of Singapore as well as for licensed harbor craft operating in the port. Part of the Maritime Singapore Green Initiative, this program is an adjunct to its Green Ship Program. In April, Singapore announced it would offer financial incentives to ships entering the Singapore flag registry or currently registered in Singapore that adopts IMO efficiency standards or green fuels. New ships registering in Singapore can qualify for reductions ranging between 50 and 100 percent for their initial registration fee and annual tonnage tax while currently registered ships that adopt the new standards qualify for reductions between 20 and 100 percent.
Under the Green Port Program Singapore is now also offering reductions in port dues. Ships calling at the port can receive a 30 percent reduction by using zero-carbon fuel ranging from hydrogen to synthetic, non-carbon fuels derived from renewable electricity based on solar, wind, or hydropower. Ships can qualify for a 25 percent reduction in port dues for using low carbon fuels including LNG and 20 percent or greater biofuel blends.
Singapore is also extending its incentives to licensed harbor craft operating in the port. Newly-built vessels using low or zero-carbon fuels or operating fully electric once they register will receive a five-year waiver of their port dues.
The Halifax Port Authority in Canada announced that it is also now offering incentives to container and RoRo vessels that voluntarily register and meet the International Association of Ports and Harbors’ (IAPH) Environmental Ship Index’s requirements for reducing greenhouse gas emissions. The ESI formula evaluates the amount of nitrogen oxide (NOx), sulfur oxide (SOx), and carbon dioxide (CO?) emitted by a vessel providing a score for each vessel. The index assists in identifying ships that proactively go beyond the emission standards required by the International Maritime Organization.
Halifax announced that it is joining the World Port Climate Initiative as an incentive provider. The WPCI was launched initially in 2008 by the IAPH and regional port organizations to provide ports worldwide with a framework to mitigate their impact on climate change. Ports in North and South America, Europe, the Middle East, Asia, and Australia have all become incentive provider ports,
The HPA will administer, and rebate annually, an ESI Harbor Dues Incentive of C$500 for vessels with an ESI-assigned Index score between 20 and 49.99, and C$1,000 for vessels with an ESI-assigned Index score of 50 or higher per port call.
The IAPH recently announced that an initiative is underway to introduce a second generation of the index as well as a new at-berth module. The proposals will be presented at the IAPH World Ports Conference later this month. Starting in 2023 with cruise ships as a pilot for a two-year period, the at-berth module is then expected to expand to other types of traffic rewarding actual performance related to each port call.