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With the emergence of shifting weather patterns, and the effects of global warming there has been an increased focus across all industry segments on re-evaluating the environmental impact of their entire supply chain.
An estimated 90% of goods consumed by end consumers are transported by sea, providing insight into the environmental damage the industry is responsible for. According to the 3rd International Maritime Organisations (IMO) study on greenhouse gas (GHG), the global shipping fleet accounts for approximately 2.5% of global CO2 emissions.
The Marine Port Authority (MPA) established the Maritime Singapore Green Initiative and pledged S$100 million to promote green initiatives in the maritime industry, a programme that has been extended till 31 December 2024. This initiative aims to support greener ships, reducing carbon emissions, adopt greener technology, use cleaner fuels, and develop smart ports.
MPA’s goal is to provide incentives to support and accelerate marine companies in their sustainability development, as there has been a significant rise in companies adopting green initiatives. To begin, management needs to ensure that the company’s strategy is aligned with its sustainability efforts. At times, there is a lack of commitment to prioritising a long-term sustainability-focused agenda. Hence, understanding how sustainability creates value for business longevity can strengthen the persistence of the ESG (Environmental, Social and Governance) effort.
Incentives from MPA
Green Ship Programme
This programme was reviewed on 1 May 2022 and provides incentives to Singapore-flagged ships that voluntarily adopt solutions exceeding the environmental regulatory standards set by the IMO.
From 1 May 2022 until 31 December 2024, MPA will offer up to a 100% reduction in initial registration fees and 100% rebates on annual tonnage taxes for eligible Singapore-flagged ships , subject to specific guidelines. For further details, please refer here.
Green Port Programme
The Green Port Programme, also reviewed on 1 May 2022, provides incentives to encourage environmental sustainability among ocean-going vessels calling at the Port of Singapore, as well as MPA-licensed harbour craft.
From 1 May 2022 until 31 December 2024, MPA will provide up to a 30% reduction in port dues for vessels that meet the programme’s criteria. For more information, see here.
Green Energy and Technology Programme
The Green Energy & Technology Programme aims to encourage Singapore-based maritime companies to develop and conduct pilot trials of green technologies to help vessels meet the targets of the Maritime Singapore Decarbonisation Blueprint: Working Towards 2050. Ocean-going vessels registered under the Singapore Registry of Ships (SRS) and harbour crafts licensed to operate within the Port of Singapore are eligible to apply.
Developments of Green and Digital Corridors with other Countries
Singapore has been proactive in establishing green corridors with its neighbours aligning this initiative with the agreement signed on October 2022 with Australia for Green Shipping Cooperation between the two countries. MPA together with the Australian Department of Infrastructure, Transport, Regional Development, Communications and Arts (DITRDCA), are working together to ensure that port operators within their jurisdictions work closely with stakeholders to take actionable steps toward decarbonising and digitalising the shipping industry. Through this partnership, DITRDCA and MPA aim to reduce carbon emissions, establish zero-carbon fuel supply chains, green port services, and accelerate the transition to green marine fuel sources.
On 24 April 2023, The MPA, the Port of Los Angeles (POLA), and the Port of Long Beach (POLB), with the support of C40 Cities, signed a memorandum of understanding (MoU to establish a green and digital shipping corridor between Singapore and the San Pedro Bay port complex. This initiative supports the decarbonisation of the maritime industry and improves operational efficiencies through digitalisation.
As leading global hub ports, Singapore, Los Angeles and Long Beach are vital nodes on the trans-Pacific shipping lane and key stakeholders in the maritime sector’s green transition. Ahead of the revision of the International Maritime Organisation (IMO)’s Initial Strategy for the Reduction of Greenhouse Gas (GHG) Emissions from Ships in July 2023, the three ports, along with C40 and other stakeholders across the maritime and energy value chains, joined forces to accelerate maritime decarbonisation. This effort aligns with the goals of the IMO, as well as the Nationally Determined Contributions (NDCs) of Singapore and the United States.
The green and digital shipping corridor aims to support the transition to low- and zero-emission fuels by ships calling at Singapore and the San Pedro Bay port complex. The parties will work to facilitate the supply and adoption of these fuels and explore the necessary infrastructure and regulations for bunkering. In addition to identifying and collaborating on pilot and demonstration projects, the MoU seeks to identify digital shipping solutions and develop standards and best practices for green ports and the bunkering of alternative marine fuels, including sharing experiences on international platforms such as the IMO.
Opportunities amid the Sector's Evolution
Against the backdrop of changes in the industry, the MPA introduced incentives that we have highlighted, which can help companies drive transformation. We believe there are significant opportunities for companies and service providers to become game changers in this evolving landscape.
