Poseidon Principles
Poseidon Principles is a framework for Banks/Financial institutions to use their influence as a major capital provider to the shipping industry in order to support the objective of IMO GHG reduction by 50% by 2050.
The four Principles are:
1. Assessment of climate alignment:
Climate alignment is a degree to check if the vessel is performing in line with the decarbonization trajectory that meets the target, set by IMO, of reducing the CO2 emission by 50% by 2050. It is calculated on a vessel basis as well as on a portfolio basis.
Vessel Basis: The carbon intensity is calculated using the ship's IMO data from which the AER (Average Efficiency Ratio) is calculated. This AER Value is then compared with required AER Value (determined by decarbonization trajectory) and the alignment is calculated as a percentage.
Portfolio Level: The climate alignment of portfolio level is calculated using the weighted average of the vessel alignment. The weighted average is computed by summation of the multiplication of debt outstanding per vessel (as percentage) in the portfolio with the climate alignment of that vessel.
Decarbonization Trajectory: It is a graph plotted on Carbon Intensity (decarbonization consistent) – Reporting Year (2012 – 2050) which is prepared by the Secretariat of Poseidon Principles to project the CO2 emissions per year meeting the IMO Absolute target. This is a tentative graph based on the IMO GHG study and is subjected to changes as per new developments and availability of data.
2. Accountability
The calculation involved in assessing the climate alignment is dependent upon the type of data provided, source and service providers of data.
3. Enforcement
The signatories will agree to work with a client or a partner (RO’s or Ship owner or third party) under a covenant clause in terms of providing correct data and required document.
4. Transparency
On becoming a signatory, the signatory will acknowledge that it is a signatory of Poseidon Principles. On an annual basis, each signatory submits the overall climate alignment of its shipping portfolio to the Secretariat by November 30 and publishes its portfolio climate alignment in its annual report as deemed appropriate. By 31 December, the Secretariat publishes all climate alignment results on www.poseidonprinciples.org.
The Principles aim to be voluntary, practical to implement, verifiable, fact-based, and effective. Signatories commit to implementing the Principles in their internal policies, procedures and standards.
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Scope
The Poseidon Principles are applicable to lenders, relevant lessors, and financial guarantors including export credit agencies. The Poseidon Principles must be applied by Signatories in all Business Activities that are 1) credit products— including bilateral loans, syndicated loans, club deals, and guarantees—secured by vessel mortgages or finance leases secured by title over vessel and 2) where a vessel or vessels is subject to the IMO Data Collection System (DCS) (i.e., vessels 5,000 gross tonnage and above trading on international voyages). This would include offshore vessels that meet that criteria as well.
Exact Technical Description of Poseidon Principles
The data submitted to a Flag State for IMO verification along with a Statement of Compliance has to be provided to the Signatory. Signatory will calculate the climate alignment on portfolio level and will submit the results to Secretariat.
Role of a Shipowner
The Shipowner will give consent to Signatories to collect the Verified IMO DCS Data along with the SoC and calculate the vessel and Portfolio Climate Alignment. Data calculation can be performed by Signatories internally or a party nominated by the Signatory. This party can be an RO or a third party.
What Verifavia Shipping can do for a Signatory
VERIFAVIA SHIPPING is the world's leading independent carbon emissions verification body for shipping under the EU MRV and the IMO DCS, accredited by UKAS, COFRAC, the Panama Maritime Authority, the Liberia Maritime Authority, and several other Flag States. Each year, we successfully verify the carbon emissions of 2000+ ships.
Over the years, VERIFAVIA SHIPPING has acquired tremendous experience in collecting fuel consumption, CO2 emission, cargo, and transport work data (and documents) from ship operators / managers / owners. We are experts in transforming, analysing and verifying vessel's operational data and efficiency parameters, and our procedures ensure robust and accurate analysis.
VERIFAVIA SHIPPING can provide the data from the RO/Shipowner and can perform independent calculation as expert third party on behalf of the Signatories. We have the manpower, technical skillset and technological capabilities to handle any amount of data.
As we are already working with leading Flag States like Panama and Liberia, we can also act as an RO for providing the data to Signatories.
Over the years, VERIFAVIA SHIPPING has acquired tremendous experience in collecting fuel consumption, CO2 emission, cargo, and transport work data (and documents) from ship operators / managers / owners. We are experts in transforming, analysing and verifying vessel's operational data and efficiency parameters, and our procedures ensure robust and accurate analysis.
VERIFAVIA SHIPPING can provide the data from the RO/Shipowner and can perform independent calculation as expert third party on behalf of the Signatories. We have the manpower, technical skillset and technological capabilities to handle any amount of data.
As we are already working with leading Flag States like Panama and Liberia, we can also act as an RO for providing the data to Signatories.
Document Referred to prepare Decarbonization Trajectory:
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