EU that pollution is a trans-boundary and trans-jurisdiction matter. This is a matter of
some interest which we shall return to.
The purpose of this chapter is to provide an elucidation of the green principles
which underpin sustainable ship financing using the Green Shipping Finance facility
as an exemplar. The implications from this research would extend beyond European
shores, as green shipping finance is gradually taking on greater prominence on the
international stage. It is premised on the proposition that the concept of greening of
ship finance should be construed broadly, as the impact of greening extends far
beyond mere ship design and build but to longer global supply chain. The challenge
of course is that a finance facility, however green, will always have contractual
constraints, policy constrictions and finance prudential limits. The wider theoretical
framework here entails a questioning of the concept of “green finance” itself.
Normatively speaking, should not all financing be “green”? This research makes
two novel contributions. The first is to link the definition of “green” to the legal
competencies of the EIB using the green shipping finance facility example. Secondly, the research problem is, in the main, how should a traditionally conservative
and contractually closed ended finance facility could and should accommodate, more
flexibly, the risks of green shipping for finance providers, whether public or private.
Hence, this chapter posits some thoughts on how these arrangements might be better
structured and tests the model adopted for green shipping financing, the so-called
blending of public-private finance, in the EU.
These matters are important not merely to the development of publicly supported
green transport financing initiatives but also for transport corridor projects elsewhere
in the world with a “green” or sustainability agenda, such as the People’s Republic of
China’s Belt and Road Initiative.
2 Literature Review, Definitions and Concepts
It is proposed at first instance to undertake a survey of the existing body of literature
on the term “green finance”. There is as expected no common definition of the term
although it is clear that in various sustainable financing facility, there may be
attempts, for commercial and/or policy reasons, to circumscribe and define the
scope of what projects are sufficiently green to qualify for financing. For example,
the UK’s Green Investment Bank requires the project to make a “positive contribution to a recognised green purpose (greenhouse gas (GHC) reduction resource
efficiency, protection of the environment and biodiversity, promotion of environmental sustainability)”.
6 The Green Investment Bank also provides specific criteria
for sustainable projects for offshore wind, waste, energy efficiency, biomass,
6 Green Investment Bank (2014a). Green Investment Principles http://www.greeninvestmentbank.
com/media/44647/green_investment_principles_01_1114.pdf.
Legal Aspects of Green Shipping Finance: Insights from the European. . .
133
some interest which we shall return to.
The purpose of this chapter is to provide an elucidation of the green principles
which underpin sustainable ship financing using the Green Shipping Finance facility
as an exemplar. The implications from this research would extend beyond European
shores, as green shipping finance is gradually taking on greater prominence on the
international stage. It is premised on the proposition that the concept of greening of
ship finance should be construed broadly, as the impact of greening extends far
beyond mere ship design and build but to longer global supply chain. The challenge
of course is that a finance facility, however green, will always have contractual
constraints, policy constrictions and finance prudential limits. The wider theoretical
framework here entails a questioning of the concept of “green finance” itself.
Normatively speaking, should not all financing be “green”? This research makes
two novel contributions. The first is to link the definition of “green” to the legal
competencies of the EIB using the green shipping finance facility example. Secondly, the research problem is, in the main, how should a traditionally conservative
and contractually closed ended finance facility could and should accommodate, more
flexibly, the risks of green shipping for finance providers, whether public or private.
Hence, this chapter posits some thoughts on how these arrangements might be better
structured and tests the model adopted for green shipping financing, the so-called
blending of public-private finance, in the EU.
These matters are important not merely to the development of publicly supported
green transport financing initiatives but also for transport corridor projects elsewhere
in the world with a “green” or sustainability agenda, such as the People’s Republic of
China’s Belt and Road Initiative.
2 Literature Review, Definitions and Concepts
It is proposed at first instance to undertake a survey of the existing body of literature
on the term “green finance”. There is as expected no common definition of the term
although it is clear that in various sustainable financing facility, there may be
attempts, for commercial and/or policy reasons, to circumscribe and define the
scope of what projects are sufficiently green to qualify for financing. For example,
the UK’s Green Investment Bank requires the project to make a “positive contribution to a recognised green purpose (greenhouse gas (GHC) reduction resource
efficiency, protection of the environment and biodiversity, promotion of environmental sustainability)”.
6 The Green Investment Bank also provides specific criteria
for sustainable projects for offshore wind, waste, energy efficiency, biomass,
6 Green Investment Bank (2014a). Green Investment Principles http://www.greeninvestmentbank.
com/media/44647/green_investment_principles_01_1114.pdf.
Legal Aspects of Green Shipping Finance: Insights from the European. . .
133