Finnvera calculated the CO2 emissions of the ship finance – The pandemic still affected the cruise industry and the CO2 calculation
Finnvera has, for the second time, calculated the carbon intensity of the ship finance portfolio according to the Poseidon Principles climate alingnment agreement. The climate alignment score is 57.3% above the decarbonisation trajectory based on the International Maritime Organisation, IMO’s, initial climate goals for the international shipping. The score differs significantly from the previous year, when the score was 7% below the international trajectory. The score still reflects the impacts of the pandemic, which affected the operating of the ships.
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.
"We calculated the CO2 emissions of our ship finance portfolio for the second time. The score differs significantly from the previous year, partly due to the calculating method. We believe that in the future the score will better correspond to the impact of our ship finance portfolio. We expect next year to be a more stable year for the cruise industry as well as for the CO2 calculation, when the ships will again operate in full capacity”, says Excutive Vice President Jussi Haarasilta.
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.
The calculation is based on a formula that takes into account the distance traveled by the vessels during the year. Regarding the calculation, the previous years, especially year 2020, were exceptional due to the pandemic, when cruise ships stayed mainly in ports, but maintenance still produced emissions. Finnvera already got below the target level for the ship finance CO2 emissions, which was positive and reflects the fact that as an export credit agency, Finnvera primarily finances new projects, better technology with fewer emissions.
The CO2 level being reported now has been calculated from the 2021 data, when the pandemic still affected the cruise industry to some extent, although cruise shipping started to recover and ships returned to operate.
Transparency and comparability in export financing is important
The shipyard cluster is significant in Finland, and approximately half of Finnvera's EUR 23 billion export credit guarantee exposure is related to ship cluster. The share of drawn ship exposure is EUR 6.4 billion (Q3/2022).
”Poseidon Principles have brought measurability and comparability to the monitoring of the climate impacts of Finnvera's ship finance. Approximately half of Finnvera's export credit guarantee exposure is related to cruise shipping cluster. Considering the scale, the climate alignment score gives us valuable information about the climate impact of our financing and that of the shipping industry. It also supports assessing the impact of Finnvera's own operations. We wish to thank our customers for providing the information needed and thereby enabling the monitoring of the CO2 emissions of our ship portfolio.”
”Mitigating climate change is at the core of Finnvera's strategy. As an export credit agency, Finnvera has good opportunities to influence the development of climate solutions, as we essentially finance new technology with fewer emissions. We believe that in the future there will be less volatility in Finnvera’s climate alignment score”, Jussi Haarasilta says.
Jussi Haarasilta, Executive Vice President, Finnvera plc, tel. +358 29 460 2601
The Poseidon Principles
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. 30 Signatories from 13 different countries together represent over 65% of the global ship finance portfolio. Finnvera became signatory to the Poseidon Principles in April 2021. Among the Signatories, there are also export credit agencies of other countries.
Read more and see previous reports: www.poseidonprinciples.org