26th February 2015, Oxford, United Kingdom
The Liberian Registry, the world’s second-largest flag state for ships, has committed to offering tax discounts of up to 50% for vessels retrofitting efficiency technologies through a financing partnership between Carbon War Room (CWR) and EfficientShip Finance (ESF). This represents more than $53 million available in tax breaks across the Liberian registered fleet in addition to the fuel cost savings that efficiency retrofits offer.
Under the agreement between The Liberian Registry, ESF, and CWR, each ship retrofitted by ESF under the innovative Self-Financing Fuel-Saving Mechanism will be entitled to a 50% discount on annual tonnage tax in the first year and up to 25% discount in the second and third years—a discount of up to $13,800 for a ship of 100,000 gross tons.
“The turnkey solutions that ESF provides to retrofit market-ready technologies that offer significant financial savings as well as reduce the carbon and other emissions produced are available to any ship owner and operator with zero capital expenditure up front.”
Oliver Petrakakos, COO, EfficientShip Finance
In July 2014, ESF became a CWR partner to provide third-party capital, technical expertise, and turnkey solutions for ship owners to retrofit their vessels under the Self-Financing Fuel-Saving Mechanism, a financing model developed by Carbon War Room and UCL Energy Institute. The model allows vessels to be retrofitted with zero capital expenditure while allowing owners to benefit from the savings in fuel, money, and carbon and other emissions.
“This represents a great opportunity for owners with ships delivered prior to the eco-boom to have their ships retrofitted with proven fuel-saving technologies,” says Christian Mollitor, Vice President and Project Manager of the green initiative at the Liberian International Ship & Corporate Registry. “It should help owners and operators reduce fuel costs while creating the potential to increase hire or charter rates or achieve better pool points, and increase asset values in the secondhand market.”