FEET adopts Singapore–Asia Taxonomy to guide ship retrofit financing

The Fund for Energy Efficiency Technologies (FEET) has adopted the second edition of the Singapore–Asia Taxonomy for Sustainable Finance to guide its investment decisions, becoming the first fund to use the framework, according to the Global Centre for Maritime Decarbonisation (GCMD).

Announced in Singapore on 11 November 2026, the move links financing for ship efficiency upgrades with revised criteria recognising qualifying vessel retrofits and technology installations that deliver measurable greenhouse gas reductions.

GCMD also announced that Lloyd’s Register has independently reviewed its methodology for calculating fuel savings from wind-assisted propulsion systems. The methodology supports the performance-based repayments used by FEET.

What does the revised taxonomy mean for shipping?

The Singapore Sustainable Finance Association, supported by the Monetary Authority of Singapore, announced the taxonomy’s second edition at COP31 in Türkiye.

For shipping, the revised criteria provide a framework for assessing investments that improve existing vessels. This addresses a practical aspect of maritime decarbonisation: emissions reductions can come from incremental equipment upgrades as well as fleet replacement.

The association consulted the Maritime and Port Authority of Singapore, GCMD, ING and DNV on applying the taxonomy to energy efficiency retrofits and installations. GCMD contributed evidence from operational trials demonstrating how fuel savings can be measured under commercial trading conditions.

Taxonomy alignment and performance verification serve different purposes. The framework guides investment eligibility, while measurement establishes whether installed equipment delivers the savings underpinning the financing arrangement.

How does FEET’s financing model work?

FEET offers up to 100% upfront financing for energy efficiency retrofits through a blended finance structure. Repayments are linked to verified fuel and regulatory savings under a pay-as-you-save mechanism.

Managed by AIM Horizon Investments, the fund appoints GCMD as its decarbonisation adviser and is supported by the Development Bank of Japan, DBS Bank and ING.

The fund closed in November 2025 with commitments of up to US$35 million. Its use of unsecured retrofit leases separates equipment financing from vessel mortgages, addressing a potential obstacle for owners seeking to upgrade ships that already carry financing obligations.

How will wind-propulsion savings be verified?

GCMD developed its methodology through a trial aboard Eastern Pacific Shipping’s Pacific Sentinel. Researchers collected 276 million data points during four months of spot-market trading in the Americas.

They screened more than 3,000 transitions between operating the sails and switching them off, identifying 203 instances where operating conditions remained sufficiently constant. This enabled the analysis to distinguish savings attributable to the sails from changes caused by other operating factors.

Lloyd’s Register concluded that the methodology aligns with relevant industry standards and incorporates current best practices for assessing wind-assisted propulsion performance.

For financed projects, participating parties will contractually agree the assumptions, data collection and analytical approach. Project data will then be audited and calculated savings independently verified before determining shipowners’ payments.

Which projects has the fund financed?

FEET announced its first deployment on 20 October 2026, financing wind-assisted propulsion installations aboard Eastern Pacific Shipping’s Pacific Sentinel and Pacific Sunstone.

Each vessel has three 22-metre suction sails. They were the first ships in the company’s fleet to adopt wind-assisted propulsion systems. The projects provide an initial application of the fund’s approach to connecting equipment finance with verified operating savings.

GCMD Chief Executive Officer Professor Lynn Loo said confidence in performance data was essential to financing efficiency improvements. AIM Horizon Investments Chief Executive Officer Marcel de Bruijckere similarly emphasised independent verification as central to agreeing repayment arrangements with shipowners.

The taxonomy adoption adds an investment assessment framework to that process, while project-level verification remains necessary to establish actual performance.