WBFM - Shipping Finance

In a carbon pricing mechanism, the significance of both contribution (tax) collection and carbon revenue distribution is comparable, as they are integral components of the same system. While contribution collection can economically incentivize the involved actors, carbon revenue distribution can encourage stakeholder participation in decarbonization through rebates, rewards, and green loans. The economic effects of a carbon tax vary significantly depending on how generated revenues are used. A well-structured organizational framework can significantly aid policymakers in optimizing the utilization of carbon revenues. An effective revenue distribution mechanism is integral to a robust fiscal policy that aims to achieve the broader objectives of efficiency, long-term growth, and equity. Despite the significant importance of carbon revenue distribution, there is a scarcity of literature discussing this topic in the maritime context. This study, by reviewing the existing literature, aims to develop a comprehensive list of possible methods for carbon revenue disbursement.

This paper explores the ways in which the sustainability reports reflect the structural causes that shape shipping companies' response to sustainability concerns, their actions taken in this direction and their organizational experiences along this way. The methodology of the paper is content analysis, and the analyzed content are the sustainability reports of listed shipping companies in the European Union. The framework within which the analysis takes place is the ontology of critical realism and its tripartite reality: real (structures), actual (actions) and empirical (experience).The Risk-Return-Impact (RRI) model that is suggested in this paper reflects the interplay between financial and sustainability considerations in the shipping industry and equips the navigation across the tripartite critical-realist reality: structures (real), action (actual) and experiences (empirical). Our findings shed light on the ways in which shipping companies act out of the intention to reproduce or transform the structures that form the sustainability discourse in the shipping industry.

This study examines the impact of the Poseidon Principles, a green finance initiative by lending institutions in the maritime shipping industry, on debt financing transactions. Using a dataset of 1,470 debt financing transactions from 564 maritime companies between 1998 and 2024, the research employs both quantitative and qualitative analysis. The quantitative analysis reveals a statistically significant reduction in the amount and duration of debt financings post-Poseidon Principles, although interest and coupon rates have increased. Moreover, our results indicate that the amount and duration of debt financings between ESG-linked and non- ESG -linked debt financings are the same. However, interest and coupon rates for ESG-linked debt financings is reduced compared to non-ESG-linked debt financings. Qualitative analysis shows a growing trend towards integrating sustainability into financing structures, emphasizing ESG-linked instruments like sustainability-linked loans. However, traditional methods dominate, especially in non-ESG transactions tied to asset-heavy projects. Despite the rise in ESG-linked financings, their adoption remains limited. This indicates a gradual shift towards sustainability in the maritime industry, with ESG-linked debt structures becoming more prominent, though their impact on main financing terms is constrained. The findings highlight the complexities of integrating sustainability into capital-intensive industries like shipping.