Singapore-based Quantum Pacific Shipping has booked a US$40M ‘green loan’ – the first issued in Asia Pacific – to fund the purchase and installation of scrubbers on its fleet.
The loan, arranged on Quantum Pacific’s behalf by its management company Eastern Pacific, highlights the rush by shipowners to install exhaust gas cleaning systems ahead of IMO’s emissions regulations in 2020.
Quantum Pacific’s green loan is an example of a relatively new form of funding for mitigating emissions. The code for green loans requires that they are approved only for investments that are both sustainable and environmentally positive. In the case of Quantum Pacific, lender BNP Paribas said it made the loan only after a rigorous third-party assessment by Vigeo Eiris, a group that analyses the environmental and sustainable credentials of companies.
Quantum Pacific’s announcement follows close on the heels of a heavyweight US$122M order from Scorpio Group for scrubbers to be installed on up to 80 of its ships, with options for another 46.
The scrubbers, which can be converted to a closed loop configuration, will cost an average of just over US$1.5M each, Scorpio announced in early December.
According to the latest figures from the Clean Shipping Alliance, more than 150 shipping companies have invested in scrubber technology so far, with many more due to follow suit.
A majority of shipowners have opted to install open-loop systems on their vessels according to reports from scrubber manufacturers.
The simmering issue over emissions abatement technology has boiled over in the press again in recent weeks, following outgoing chief executive of the Maritime and Port Authority of Singapore, Andrew Tan, announcing Singapore would ban the release of process – or ‘wash’ – water from open loop scrubbers in its waters.
The trade body for scrubbers, the Exhaust Gas Cleaning Systems Association, immediately fired back, accusing the authority of making the announcement “without prior notice or discussion with IMO, despite the fact that the Singapore MPA is a signatory to the Marpol Annex VI”. The association also criticised the authority for coming to its decision without providing “scientific evidence for its decision” and without consulting the industry first.
Wash water discharge from open loop scrubbers has been banned in several jurisdictions including Belgium, California, the Rhine riverine system in the EU and Massachusetts in the US. And last week, China’s Maritime Safety Administration said they would ban scrubbers on inland waterways that carry large volumes of cargo. China has decided not to extend the ban to coastal waters, however.