Cyprus Shipping Ministry to establish new incentives for Shipping Emissions Reductions
According to the Cyprus Investment Promotion Agency (CIPA), the Cyprus Shipping Deputy Ministry (SDM) has announced a new range of green incentives to reward vessels that demonstrate effective shipping emissions reductions.
Nicosia, Cyprus: 28 April 2021
CIPA reports that from fiscal year 2021, the annual tonnage tax will be reduced by up to 30% for each vessel that demonstrates proactive measures to reduce its environmental impact, ensuring the Cyprus shipowners are rewarded for sustainable shipping efforts.
According to Maritime Cyprus, the Cyprus SDM believes broad and diverse measures are needed at both a global and regional level to achieve emissions reduction targets and a sustainable future for the Cyprus shipping industry. These include:
The use of cleaner fuels
The deployment of the relevant fuel infrastructure
The electrification of ships
The use of efficiency technologies.
The Cyprus Shipping Ministry announced that the reduction of the Cyprus Tonnage Tax System would be provided by comparing what emissions reductions are required of a Cyprus-registered vessel with what it achieves. For example:
EEDI - vessels that have achieved a further reduction of their attained EEDI compared to the required EEDI (Regulation 20 / MARPOL ANNEX VI) will obtain the respective annual tonnage tax rebate of between 5 - 25%.
IMO DCS - the environmental incentive relating to the IMO Data Collection System (DCS) applies to ships of 5,000 GT and above that comply with Regulation 22A of MARPOL ANNEX VI. Ships that demonstrate reduction of the total fuel oil consumption in relation to the distance travelled, compared to the immediately previous reporting period, will obtain an annual tonnage tax rebate of between 10 – 20%
Alternative fuels - vessels using an alternative fuel and achieving CO2 emissions reductions of at least 20% in comparison with traditional fuels will receive a rebate on annual tonnage tax of between 15 - 30%. This will be reviewed on a case by case basis, following a review of documents submitted from a class society.
Any vessel detained for any reason during PSC inspection that violates any regulation of the European Commission related to the environmental protection or in laid-up condition (warm or cold) during the calendar year will not be eligible for the incentive.
Vassilios Demetriades, the Cyprus Shipping Deputy Minister, commented:
“Cyprus believes incentives such as this will encourage greater environmental sustainability across the global industry while also enhancing Maritime Europe’s competitive advantage in new green technologies. This creates opportunities for jobs and growth, providing a first-mover advantage to the EU shipping industry. The IMO has set clear objectives for 2030 and 2050, and all industry stakeholders must unite to create a clear pathway to achieve and exceed these goals.”
According to Maritime Cyprus, Cyprus ranks among the top international fleets of shipowners. It flags over 1,000 oceangoing vessels with a total gross tonnage exceeding 24 mln.
Cyprus is also in the process of formulating a long-term strategic vision for shipping, maritime, and marine-related activities, addressing the current challenges and opportunities, and setting a vision, mission, and objectives for the next two decades (2021-2040).
For more information on the Cyprus SDM and the latest green incentives for shipping in Cyprus, please visit Environmental Incentives.pdf
Cyprus Investment Promotion Agency (CIPA). 28 April 2021
Cyprus Shipping Deputy Ministry
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