Ensuring adequate financing for European shipping
To enhance Europe’s economic security and maintain its competitive edge, European shipping companies need access to competitive financing. Strong ship financing in Europe will benefit the maritime sector and the broader economy by fostering innovative and sustainable shipping solutions. Today, financing in Europe heavily relies on the banking sector, which is crucial for shipping SMEs—the backbone of EU shipping.
European ship financing requires a financial framework that considers the sector’s unique features and supports its competitiveness. This framework should include a diverse toolbox of financing and funding solutions from banks, capital markets, and European and national funds. However, over the past 15 years, European ship finance has declined due to stricter banking capital requirements, pushing companies to seek finance elsewhere. This trend is critical given Europe’s climate ambitions and the ongoing energy transition in shipping.
To address these challenges, prudential regulation and risk weight requirements should be revised to reflect the unique needs of the shipping sector, enabling banks to support sustainable shipping. Enhancing financing opportunities through capital markets and private investors is also essential for better risk sharing in innovative projects.
Urgent funding needs must be met by ensuring the ETS Innovation Fund and the EIB requirements are suitable for innovative and transitional projects. Funding scales should be adapted to benefit SMEs, and the definition of European added value should recognise the international and strategic role of shipping.
Finally, definitions of sustainable projects based on ESG should be designed to support financing for the energy transition and climate goals. The technical screening criteria under the taxonomy should be reviewed to ensure they are fit for purpose.
