Incentivizing the green ships
Singapore’s Maritime and Port Authority (MPA) will offer discounts on some fees and taxes for ships committed to cutting emissions beyond what is required by the International Maritime Organization (IMO), starting from 1 May.
With effect from 1 May2022until 31 December 2024, MPA will provide incentives to Singapore-flagged ships which:
- Exceed IMO’s MARPOL Annex VI Phase 3 EEDIrequirementsby 10% or more;
- Adopt engine capable of using low-carbonfuelswith CF(conversion factor between fuel consumption and CO2emission)2equivalent to or lower than LNG(i.e. (bio)-LNG, (bio)-methanol, (bio)-ethanol); or
- Adopt engine capable of using zero-carbon fuels (e.g. ammonia, hydrogen).
A ship that exceeds the requirements of IMO’s Marpol Annex VI Phase 3 EEDI targets by 10% or more will enjoy a 50% reduction on initial registration fees (IRF) and a 20% rebate on the annual tonnage taxes (ATT).
A ship that is already registered with the Singapore Registry of Ships but exceeds the IMO EEDI target by 10% or more can also receive a 20% rebate on the ATT if it qualifies under the GSP.
Vessels which use LNG or fuels with conversion factor lower than LNG get 75% reduction on the IRF and 50% rebate on the ATT.
Finally, Singapore-flagged ships that use zero-carbon fuels such as ammonia or hydrogen as their primary fuels will get 100% reduction on the IRF and 100% rebate on the ATT.
Tax incentives always welcome new investment and favor trade. For big transportations, like ships and cruises, these incentives help them to lower their costs and environmental impact by spending more on their efficiency.
