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Finnvera calculated the CO2 emissions of the ship finance – The climate alignment score for the year 2021 is below the international trajectory

The over 300-meter long Costa Toscana was delivered from Meyer Turku shipyard in early December 2021. Finnvera granted a buyer credit guarantee for the vessel in 2017. “We believe that Finnvera's participation in the financing will help to promote the shipbuilding industry's transition to lower-emission solutions”, says Executive Vice President Jussi Haarasilta.
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Finnvera has, for the first time, calculated the carbon intensityof the ship finance portfolio. The climate alignment score is seven per cent below the decarbonisation trajectory based on the International Maritime Organisation, IMO’s, initial climate goals for the international shipping. The score reflects an exceptional year due to the pandemic, when cruise ships stayed mainly in ports, but maintenance still produced emissions. Finnish export credit agency Finnvera committed to the Poseidon Principles climate alignment agreement in April 2021.

The Poseidon Principles members are leading ship financiers, such as international banks, but there are export credit agencies among them. The principles are consistent with the policies and ambitions of the International Maritime Organization, including its ambition to reduce shipping’s total annual greenhouse gas emissions by at least 50% of 2008 levels by 2050. Commitment to the Poseidon Principles is a concrete step in Finnvera’s sustainability and corporate responsibility.

"This is the first time we calculated the carbon intensityof our ship finance portfolio. The calculation is based on a formula that takes into account the distance traveled by the vessels during the year. Therefore, the score reflects an exceptional year due to the pandemic, when cruise ships stayed mainly in ports, but maintenance still produced emissions. Finnvera finances new builds that have positive impact to the climate alignment score and we look forward to follow up the results once cruise industry again is operating in full", says Excutive Vice President Jussi Haarasilta.

"Like other export credit agencies, Finnvera has good opportunities to curb climate change, as we finance new projects, better technology with fewer emissions."

Financing new technology promotes transition towards lower-emission solutions

The shipyard cluster is significant in Finland, and approximately half of Finnvera's EUR 22 billion export credit guarantee exposure is related to ship cluster. The share of drawn ship exposure is EUR 4.5 billion (at the end of 2020). Therefore Poseidon Principles is of particular importance to Finnvera and to the assessment of the development of the ship portfolio from a climate perspective.

Even during the covid-19 pandemic, new vessels have been delivered to buyers from Finland. In the beginning of December 2021 Meyer Turku shipyard delivered the over 6 000 passenger and 180 000 GT cruise ship Costa Toscana to Costa Cruises. The ship features technological innovations to reduce environmental impact. For instance, the entire daily water requirement is met by transforming seawater using desalination plants. Energy consumption is minimised through design and an intelligent energy efficiency system. The ship is powered by liquefied natural gas, LNG.

The Helsinki Shipyard in turn delivered in early December the first of two ships ordered by the cruise operator Swan Hellenic. The delivered ship SH Minerva is a 113-meter Polar Class Expedition Cruise Vessel with a PC 5 ice-strengthened hull, designed for 152 guests plus a crew of 120. The ships are designed for minimal environmental impact and to comply with the latest emission standards. In addition, the ships are ready for future emission-free silent sailing in port as well as wildlife and marine reserves.

"We believe that Finnvera's participation in the financing will help the Finnish shipbuilding industry to stay at the technological forefront and promote the industry's transition to lower-emission solutions."

Transparency in export financing is important

Poseidon Principles provides a framework with which Finnvera can measure the carbon intensity of ship finance on an annual basis and compare it to the established decarbonisation trajectory.

"A special thanks to our customers for providing the information and making possible the monitoring of the development of emissions. As a public provider of export finance and of long-term financing, transparency about the climate impact of our financing is important to us. Corporate responsibility is the foundation of our strategy."

The Copenhagen-based Poseidon Principles, launched in June 2019, are developed by leading international shipping banks, international industry players and academic institutions as well as export credit agencies. Finnvera became the 25. signatory to the Poseidon Principles in April 2021.  The members’ combined share of the international ship finance is approximately USD 175 billion. There are also export credit agencies in other countries.

*This is how carbon intensity is measured according to Poseidon Principles

Poseidon Principles measures carbon intensity. The data based on which the overall climate alignment score is calculated is distance travelled, amount of fuel consumption for each fuel type, and size of the vessel. The outstanding debt per vessel also play a role when calculating the weighted average of the scores.

 

Further information:

Jussi Haarasilta, Executive Vice President, Finnvera plc, tel. +368 29 460 2601

Link to the Poseidon Principles report

 

Read also:

Finnvera becomes signatory to the Poseidon Principles to measure the greenhouse gas emissions of ship finance | Finnvera

Two cruise vessels to Carnival shipping company | Finnvera

Finnvera provides financing for two Helsinki Shipyard’s cruise ship deliveries | Finnvera