A recent study by UCL Energy Institute has highlighted a major flaw in the current green financing approach in the shipping industry. While banks offer lower-cost loans to companies with strong climate credentials, individual low-carbon ships do not receive similar benefits, potentially stalling the adoption of greener technologies in shipping.
Company vs. Ship-Level Financing
Banks tend to reward companies with good overall climate scores, but the financing terms for individual ships do not reflect their carbon efficiency. This discrepancy means that low-carbon ships aren’t receiving the financial incentives necessary to accelerate the industry’s decarbonisation efforts.
Poseidon Principles & Stranded Assets Risk
Although the Poseidon Principles aim to increase transparency in shipping emissions, they haven’t yet resulted in lower financing costs for more efficient ships. With many vessels still reliant on fossil fuels, the study warns of growing risks of stranded assets as stricter climate regulations are enforced.
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Source: UCL Energy Institute
