The Singapore Seaport Authority has issued new incentives for Singapore-flagged vessels undertaking decarbonization efforts.
Incentives include a reduction in the initial registration fee of 20-100% for new ships registered on the Singapore Ships Registry as well as tax rebates on the annual tonnage tax.
Singapore’s maritime industry is vital to its economy, as the country is strategically located near the Strait of Malacca, one of the busiest shipping lanes in the world. Singapore already handles more than 600 million tonnes of cargo annually, showing the importance of the country’s shipping industry and its ports to global trade.
On April 22, 2022, the Maritime Port Authority (MPA) of Singapore issued new incentives for Singapore-flagged vessels under the Green Ship Program (GSP). The program offers Initial Registration Fee (IRF) discounts ranging from 20% to 100% for existing vessels and those about to register with the Singapore Register of Ships (SRS).
The GSP was first launched in 2011 and is designed to reward ship owners who voluntarily modify their vessels to exceed environmental standards set by the International Maritime Organization (IMO). The new incentives are available from May 1, 2022 through December 31, 2024.
The MPA will offer incentives to Singapore-flagged vessels that meet any of the following conditions:
A new ship that exceeds IMO Phase 3 EEDI requirements by 10% or more will receive a 50% reduction in IRF. In addition, the vessel will benefit from a 20% discount on the annual tonnage tax (ATT) which is payable each year. Owners should refer to Appendix B of the incentive for vessel size and financial incentive application schedule.
Existing ships already on the SRS will not be eligible for the 40% IRF discount but will be eligible for the 20% ATT discount.
Finally, ships using carbon-free fuels as their primary fuel will benefit from a 100% reduction in IRF and a 100% discount on ATT.
This article was first published by AseanBriefing which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from its offices worldwideincluding in in China, hong kong, Vietnam, Singapore, Indiaand Russia. Readers can write to [email protected]