Shippers are investing in scrubbers, better blades and sleeker boats to clean up sea and air.
Maritime shipping is costly, competitive, and often confronted with new regulations on transport or the climate. “It’s a difficult industry, highly leveraged, with low margins, so helping the sector is a priority,” says Mark Clintworth, the European Investment Bank’s shipping expert.
One of the industry’s main challenges is protecting the environment. Some ships’ motors emit a lot of carbon dioxide and sulphur, and these pollutants must be filtered with expensive devices. There’s also an environmental risk posed by ballast water that ships use to remain stable. When dumped back into the sea, this water can transfer marine species from one region to another.
Tom Pippingsköld, chief financial officer at Helsinki-based shipping company Finnlines Group, says the industry has taken many steps to reduce emissions and prevent problems related to ballast water, while also making shipping less expensive and cleaner.
Green and sustainable
“We have reduced the environmental impact of shipping by improving ships’ fuel economy, installing exhaust gas scrubbers that remove harmful fumes from ships’ emissions, reblading the ship’s propulsion systems and treating the ships’ bottoms with a silicone antifouling product for reducing hull friction,” he says. “Through these investments, which exceed EUR 100 million, the Finnlines fleet is green and sustainable.”
Finnlines is taking many steps to reduce emissions while making shipping cleaner and cheaper.
The international shipping industry transports about 90% of global trade, but represents only 2.2% of global emissions. Shipping should be thought of as a solution for environmental problems, Pippingsköld says.
The EIB is investing hundreds of millions of euros to promote green shipping, supporting companies and technologies that make ships more energy efficient and environmentally friendly.
The EU bank signed a EUR 50 million loan last year to help Finnlines complete its EUR 100 million environmental technology investment programme. The loan helped the company install scrubbers to filter out sulphur and other harmful particles. Finnlines, which operates in many key ports in Finland, Sweden, Russia, Estonia, Poland, Germany, Denmark, the UK, Belgium and Spain, has made sulphur abatement technology and new propulsion systems priorities in making shipping cleaner.
Finnlines is improving propulsion systems and treating ships’ bottoms to decrease friction.
Better engines, cleaner water
In addition to ship operators, the Bank is supporting ship manufacturers. The EIB is finalising a EUR 75 million loan guarantee to help the Irish Ferries company build a ferry to carry 165 freight vehicles and 1,885 passengers and crew. The ship, expected to be ready next year, will have more efficient engines and use scrubbers to clean the air, so it will meet new EU emission standards. It also will use a cleaner ballast water system.
The Irish deal is part of the EU bank’s new EUR 250 million Green Shipping Programme Loan, which encourages investment in environmentally friendly shipping. The programme is an umbrella project of the bank’s European Fund for Strategic Investments, set up to fill financing gaps across Europe.
“These investments in shipping are important for protecting the environment, but on the financing side, the increase in environmental regulations is causing significant increases in investment requirements for these companies,” says Michael Finucane, an EIB loan officer. “So it is important that the EIB is there for the sector.”
The Irish deal for a new ferry was signed under the EU bank’s Green Shipping Programme Loan.
“The economic and environmental risks in the sector are making banks pull out of the shipping market, so the EIB is doing its best to fill this gap,” adds Clintworth.
Under a complementary programme of the EIB, EIB signed two EUR 150 million framework agreements with each of ABN AMRO in the Netherlands and with Société Générale of France to encourage lending that helps shippers reduce emissions and become more fuel efficient.
Green technology program
Finnlines plans more investments to make its ships cleaner and more efficient. The company has renewed its fleet through a 10-year, EUR 1 billion green technology program. It will keep looking into better engines and propulsion technologies, which might include a system of batteries that supply energy while the vessel is in port, rather than the engines.
“We are now transporting more cargo and at the same time we have been able to reduce our fuel consumption, meaning there are lower emissions,” Pippingsköld says. “These investments are helping to make the shipping sector a more sustainable and environmentally friendly mode of transport.”
(If you are interested in shipping investments, contact Mark Clintworth, the EIB’s lead shipping specialist, at m.clintworth@eib.org.)
