- The Global Centre for Maritime Decarbonisation (GCMD) advocates for Pay-As-You-Save (PAYS) as a viable path to reduce emissions in the maritime industry.
- Their white paper highlights the need for improved energy efficiency to achieve decarbonization goals, despite challenges in green fuel availability and cost.
- PAYS offers a financing model where energy-efficient upgrades are installed without upfront investment, fostering collaboration and reducing carbon emissions.
The Global Centre for Maritime Decarbonisation (GCMD) emphasizes the importance of improving energy efficiency to minimize fuel consumption and reduce costs in the maritime industry. Despite challenges posed by green fuel limitations and costs, GCMD views Pay-As-You-Save (PAYS) as a promising solution to accelerate emission reduction efforts.
Current Landscape and Challenges
From 2008 to 2022, the maritime industry achieved a commendable 32% gain in energy efficiency through technical and operational advancements. However, absolute emissions have not decreased significantly due to rising seaborne trade. With a projected increase in trade volume and ambitious emission reduction targets set by the International Maritime Organization (IMO), bridging the gap between current efficiency levels and future targets remains a significant challenge.
The Pay-As-You-Save Model
PAYS offers a financing model where building owners can install energy-efficient upgrades without upfront investment. Instead, a third party assumes the investment responsibility, and repayment is linked to realized energy savings over time. This shared risk and reward model benefits all stakeholders involved and contributes to the overall value of the building.
Implementation in the Maritime Sector
To effectively apply PAYS in the maritime industry, multi-party collaboration agreements are essential. These agreements encompass technology installation, data validation, and data-driven financing. Collaboration among solution providers, shipyards, shipowners, financiers, and other stakeholders is crucial for successful implementation.
Key Collaborative Agreements
Three types of collaborative agreements are vital for enabling PAYS in the maritime sector:
1. Technology Installation Agreement: This agreement outlines the terms for installing Energy Efficiency Technologies (EETs) and ensures accurate evaluation of technology impact on fuel savings.
2. Data Validation Agreement: Facilitates transparent sharing of validated performance data through a secure platform, establishing processes for secure data collection and authentication.
3. Data-Driven Financing Agreement: Balances stakeholder interests and enables equitable sharing of risks and fuel savings revenue, linking financing to data quality standards.
GCMD’s advocacy for Pay-As-You-Save financing highlights a promising path to accelerate emission reduction efforts in the maritime industry. By fostering collaboration and leveraging innovative financing models, stakeholders can overcome challenges and work towards achieving ambitious decarbonization goals.
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Source: Safety4sea
