Singapore to offer tax discounts for greener vessels

Singapore’s Maritime and Port Authority (MPA) will offer discounts on some fees and taxes for ships committed to cutting emissions beyond what is required by the International Maritime Organization (IMO), starting from 1 May.

The MPA announced the discounts in a circular updating its Green Ship Programme (GSP) for Singapore-flagged ships released on 22 April.

A vessel that exceeds the requirements of IMO’s Marpol Annex VI Phase 3 Energy Efficiency Design Index (EEDI) targets by 10% or more will get a 50% reduction on initial registration fees (IRF) and a 20% rebate on the annual tonnage taxes (ATT). A ship that is already registered with the Singapore Registry of Ships but exceeds the IMO EEDI target by 10% or more can also receive a 20% rebate on the ATT.

The discounts will apply until 31 December 2024.

Vessels that use LNG or fuels with a conversion factor lower than LNG as its primary fuel will get a 75% and 50% discount on the IRF and ATT respectively. These fuels include bio-LNG, bio-methanol and bio-ethanol.

Vessels that use zero-carbon fuels such as ammonia and hydrogen as their primary fuel do not need to pay registration fees or tonnage taxes.

The GSP is part of the city state’s Maritime Singapore Green Initiative. “The key principle of the GSP is to reward shipowners who voluntarily adopt solutions that enable ships to exceed environmental regulatory standards set by the IMO,” the MPA circular said.

The IMO has called for the shipping industry to lower carbon emissions by at least 40pc by 2030 and preferably by 70% by 2050 compared with 2008 levels.

Source: Argus Media