January 21, 2021

Beginning in fiscal year 2021, the annual tonnage tax will be reduced by up to 30% for each vessel that demonstrates proactive measures to reduce its environmental impact.

Cyprus' Vice Ministry of Maritime Transport has announced a new range of green incentives to reward ships that demonstrate effective emission reductions. Starting in fiscal year 2021, the annual tonnage tax will be reduced by up to 30% for each ship that demonstrates proactive measures to reduce its environmental impact according to the following criteria:

• EEDI - Vessels that have achieved a greater reduction in their EEDI achieved compared to the required EEDI (Regulation 20 / MARPOL ANNEX VI) will obtain the respective annual reduction in tonnage tax of between 5 and 25%.
• IMO DCS: the environmental incentive related to the IMO Data Collection System (DCS) applies to vessels of 5,000 GT or more that comply with Rule 22A of MARPOL ANNEX VI. Vessels that demonstrate a reduction in total fuel oil consumption relative to distance traveled, compared to the immediately preceding reporting period, will receive an annual tonnage tax reduction of 10-201TT.
• Alternative fuelss: Ships using an alternative fuel and achieving a reduction in CO2 emissions of at least 20% compared to traditional fuels will receive an annual tonnage tax reduction of between 15 and 30%. This will be reviewed on a case-by-case basis, following a review of documents submitted by a classification society.

Vessels detained for any reason during the PSC inspection, that violate any European Commission regulation related to environmental protection, or that are in a state of rest - hot or cold - during the calendar year will not be able to benefit from the incentive. .

"As a leading maritime nation, we have an obligation to support efforts to reduce GHG emissions. We believe that flag States are well placed to help shipowners make sustainable shipping decisions from which they can benefit both operationally and economically. "Striking the right balance between ecological transformation and competitiveness is a challenge, but it also presents opportunities."

Vassilios Demetriades, Vice Minister of Maritime Transport of Cyprus.

Demetriades urged Europe to press ahead with the development of green shipping, providing a "world-class advantage" to the EU maritime sector.

"The IMO has set clear targets for 2030 and 2050, and all industry stakeholders must come together to create a clear pathway to achieve and exceed these targets. We believe flag States are well positioned to help shipowners achieve "make sustainable transportation decisions from which they can benefit both operationally and economically. Striking the right balance between ecological transformation and competitiveness is a challenge, but also presents opportunities."

Vassilios Demetriades, Vice Minister of Maritime Transport of Cyprus

Cyprus has promoted the use of cleaner fuels, the deployment of relevant fuel infrastructure, the electrification of ships and the use of energy efficient technologies, but believes that shipowners should be rewarded for investing in sustainable practices to accelerate their adoption. .