Several leading banks in the shipping industry, including HSH Nordbank and KfW IPEX-Bank, use energy-efficiency data in making investment and financing decisions, according to the NGO Carbon War Room (CWR).
HSH Nordbank, KfW IPEX-Bank, and other banks surveyed by CWR have indicated that vessel efficiency rankings—such as the A to G GHG Emissions Rating developed by independent ship vetting company RightShip and CWR—now form an important part of assessing risk and return, with inefficient vessels now representing a higher-risk investment.
Energy efficiency data is also being used in credit-approval processes for vessel purchases, loan assessments for retrofit projects, and re-sell or scrapping decisions, with banks citing efficiency as a key indicator for a vessel’s profitability.
”In view of the beneficial risk profile and environmental benefits, we favour eco-ships over ships with poorer energy efficiency,” Carsten Wiebers, Global Head of Maritime Industries, KfW IPEX-Bank, said.
”We see a clear trend towards a two-tier market of high- and low-efficiency vessels—more energy efficient vessels have an enhanced marketability as well as a higher revenue potential for the ship owner and thus a more favourable risk profile for financiers.”
The existence of a two-tier market is becoming increasingly evident: 25% of the non-container charter market vet potential vessels for efficiency before charter and recent RightShip data analysis shows that the average lifespan of an ”A” rated vessel is likely to be up to eight years longer than that of a ”G” rated vessel.
In addition, in 2014, three ports—Port Metro Vancouver, Port of Prince Rupert, and Port of Barbados—began to use the A to G GHG Emissions Rating to offer financial incentives to the owners of more-efficient vessels entering their ports.
KfW IPEX-Bank also revealed last year that efficient container vessels of comparable capacity consume 30% less bunker fuel than inefficient vessels at the same operating profile. This represents a significant cost advantage, particularly if competing vessels are switching to more-expensive distillate fuels in Emission Control Areas.
Each individual vessel in the global shipping industry’s 90,000+ fleet represents a multi-million-dollar investment. Ship owners and operators rely on the banking sector to ensure they can build, buy, upgrade, and maintain these assets. This means that leading shipping banks have a huge influence on the way the market moves and develops; each bank must carefully control its market exposure and efficiency is fast becoming a key measure, says CRW.
Image: Ecoships