While the outbreak of the Covid-19 pandemic has affected the global shipping industry, it has not derailed implementation of stricter environmental, social, and governance (ESG) regulations that are pushing investors to finance only less pollutive and more fuel-efficient ships or “clean” vessels.
The reason is IMO 2020, a new International Maritime Organization (IMO) regulation that took effect on January 1 2020, setting the maximum limit of sulphur content of marine fuels at 0.5%. The objective of the regulation is to reduce the air pollution created in the shipping industry by reducing the sulphur content of the fuels used by its ships and vessels plying the waters of the world.
The IMO is the United Nations body for the global shipping industry. In April 2018, it adopted targets aimed at reducing the industry’s greenhouse gas emissions by at least 50% before 2050 compared with those of 2008.
“What we’re seeing in terms of capital flow both from an equity perspective and from a debt perspective is that capital is very much aligned with companies that have a very prime focus on pursuing these technological innovations that improve fuel consumption,” says Andrian Dacy, global head of Transportation J.P. Morgan Asset Management. “We’re not seeing capital going to older vessels, it’s really focused on the newer ones.
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Source: Hellenic Shipping News