![]() ![]() The text of the Standardised Covenant is set out in the Principles and requires shipowners/operators to provide certain data to their financiers relating to (amongst other things) their vessels' fuel consumption to enable the calculation of carbon intensity. It is hoped that this will be aided by the inclusion in finance documentation of a standardised covenant clause (Standardised Covenant). ![]() Only when a flag state has determined that the data has been reported in accordance with the IMO requirements will it issue the ship with its Statement of Compliance.Įnforcement: obviously, for the Principles to deliver their intended purpose, there needs to be an equilibrium of obligations on those who are signatories. The data is then reported to the flag state at the end of each calendar year by the vessel owners and the flag state is required to transfer this data to the IMO. The DCS requires owners to collect consumption data of each type of fuel oil they use. The DCS is mandatory for ships of 5,000 gross tonnage and above and which operate internationally. The trajectory being that which aims to meet the IMO's reduction of GHG referred to above.Īccountability: in order to ensure a level playing field amongst the signatories to the Principles, the information which is provided by them to satisfy the principle of Assessment of Climate Alignment relies solely on data types, sources and service providers established and identified by the IMO's Fuel Oil Data Collection Service (DCS). The PrinciplesĪssessment of Climate Alignment : each signatory to the Principles has agreed by its accession to them, to take an annual measurement of the carbon intensity of their shipping portfolios and to assess the extent to which it aligns with the decarbonisation trajectory set out by the IMO. The Principles follow the IMO's goals announced in their Initial Greenhouse Gas (GHG) Strategy in April 2018 to reduce GHG emissions produced by shipping by at least 50% by 2050 (with 2008's emissions as the baseline). The IMO is the United Nations specialised agency with responsibility for the safety and security of shipping and the prevention of marine and atmospheric pollution by ships. The framework is designed to encourage financial institutions to include climate considerations in their lending decisions and to align their ship finance portfolios with responsible environmental behaviour and incentivise international shipping's decarbonisation in line with the climate goals of the International Maritime Organisation (IMO). The Poseidon Principles (Principles) were launched on 18 June 2019 and were developed in response to the need of a global framework for responsible ship finance. ![]()
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