The Cyprus Shipping Deputy Ministry (SDM) has introduced a series of environmental incentives to support shipowners in their decarbonization efforts.
As part of its ongoing commitment to monitoring environmental developments at both international and European levels—and in alignment with global efforts to reduce emissions in the shipping industry—the SDM has announced that the Council of Ministers has approved a new set of green incentives.
Effective from January 2024, shipowners of Cyprus-flagged and EU/EEA ships that implement proactive measures to reduce their environmental impact can benefit from an annual tonnage tax reduction of up to 30%. This initiative rewards shipowners for their commitment to sustainable shipping practices and encourages the adoption of greener technologies.
Regulatory Commitment and Compliance
The maritime industry is undergoing a significant transformation, with sustainability at the forefront of global shipping policies. As a key maritime hub, Cyprus is taking proactive steps to promote green shipping and environmental sustainability through regulatory frameworks, industry incentives, and technological innovation.
Cyprus is a signatory to the Paris Agreement, which aims to reduce greenhouse gas (GHG) emissions, and the United Nations Convention on the Law of the Sea (UNCLOS), a widely ratified treaty focused on protecting and preserving the marine environment.
As a member of the European Union, Cyprus adheres to EU directives and regulations, including those outlined in the European Green Deal and the International Maritime Organization (IMO) framework. The country also aligns with the United Nations' Sustainable Development Goals (SDGs), particularly those addressing climate change and environmental sustainability.
Cyprus actively supports the IMO’s target of reducing GHG emissions from international shipping by at least 50% by 2050 compared to 2008 levels. To achieve this, Cyprus has implemented measures that encourage compliance with:
- The Energy Efficiency Existing Ship Index (EEXI), which sets efficiency standards for existing vessels.
- The Carbon Intensity Indicator (CII), which assesses and monitors ships' emissions based on operational efficiency.
Furthermore, the Shipping Deputy Ministry plays a crucial role in promoting sustainability initiatives by offering guidance and incentives for shipowners and operators to transition towards eco-friendly solutions.
Financial and Operational Incentives
Recognizing the financial challenges associated with transitioning to sustainable shipping, Cyprus offers a range of incentives for shipowners who adopt green technologies.
The Cyprus Tonnage Tax System, one of the most competitive in the EU, includes provisions for shipowners who implement environmentally friendly practices. Additionally, financial grants and subsidies are available for vessels that:
- Comply with stringent emission reduction standards.
- Utilize low-carbon fuels, such as biofuels, LNG, or hydrogen.
- Invest in innovative technologies to improve energy efficiency.
Port Infrastructure and Alternative Energy Use
Cyprus is upgrading its port infrastructure to accommodate eco-friendly shipping solutions. A key focus is the expansion of shore-side electricity (cold ironing), enabling vessels to reduce emissions while docked by using electricity instead of onboard fuel-powered generators.
A notable development is the launch of The Althaia Barge at Limassol Port—a floating cold ironing unit powered by compressed biomethane. Developed as part of the BioCNG-to-CI project, this initiative provides green electricity to ships at berth or anchor, supporting the decarbonization of shipping and promoting the circular economy.
Additionally, Cyprus is exploring the integration of Liquefied Natural Gas (LNG) bunkering facilities to support vessels transitioning to cleaner energy sources.
A Sustainable Future for Cyprus Maritime
By implementing robust regulations, investing in innovative technologies, and providing financial incentives, Cyprus is playing a crucial role in driving the transition toward sustainable shipping.
The commitment of the Cyprus maritime industry to green practices is positioning the country as a leader in eco-conscious shipping, contributing to global environmental goals while maintaining its competitive edge in the industry.
As the maritime sector continues to evolve, Cyprus remains dedicated to fostering a greener, more sustainable future for global shipping.
HOW BYBLOSERVE CAN ASSIST YOU?
We are here to support you in your move toward greener shipping. We assist shipowners, managers, and other maritime professionals in meeting new environmental requirements. Our team offers legal and advisory services to help with compliance, making use of available incentives, and adopting sustainable practices. We're here to guide you through every step with confidence.
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