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The greener, the cheaper: tax discount for green ships in Danish port

By State of Green, January 07, 2020

As the first port in Denmark, the Port of Aarhus grants a tax discount to “green ships”. The use of tax discounts has proven successful for increasing green maritime transportation in ports of neighbouring countries.

The more sustainable the ship, the less you pay in the Port of Aarhus, Denmark. Since 1 January this year, the Port of Aarhus is aiming to motivate shipping companies calling at the port to become more sustainable.

Their tool for this is to give a shipping tax discount to all ships that achieve at least 30 points in the ESI (Environmental Ship Index). In the index, the ships are awarded points in relation to their emissions of CO2, SOx, NOx and their opportunity to receive shore power.

The decision to grant the discount is part of the Port of Aarhus’s sustainability strategy and the discount amounts to 4.5 per cent of the shipping tax.

-Related solution: Ports as green first movers

Incentive for green ships and booming business

Chief Commercial Officer at the Port of Aarhus, Nicolai Krøyer, points out that according to the Danish Harbour Act, the Port of Aarhus has a duty of reception for vessels that wish to enter the port. Therefore, the Port of Aarhus has virtually no influence on which vessels arrive, nor on the vessels’ use of fuel.

“That is why we are now trying to motivate the vessels with an economic tool that awards sustainability. Of course, it is our hope that the shipping companies that are already sailing to and from Aarhus will respond positively to the opportunity to save shipping tax,” said Nicolai Krøyer in a press release (in Danish).

Nicolai Krøyer hopes that the discount can make the Port of Aarhus attractive to more shipping companies that are not currently calling to port in Aarhus.

“Obviously, we are excited about whether we will see a business effect from the fact that we are the first mover on sustainable shipping taxes. We hope that in this context we can attract new customers who already have a sustainable profile and thus can see the benefit of calling here at a lower price,” said Nicolai Krøyer.

-Related solution: Onshore power for ships

Discount is a successful tool in Sweden and the Netherlands

Both the Port of Gothenburg in Sweden and the Port of Rotterdam in the Netherlands have successfully implemented green tax discounts. One of the world’s busiest ports, the Port of Rotterdam has been working with green tax discounts since 2015 for ships running on the more sustainable liquefied natural gas (LNG). In 2019, the Port of Rotterdam extended their discount to include smaller vessels, too.

A similar discount to the one in Rotterdam – and now in Aarhus – has been successful in increasing the green traffic for the Gothenburg Port Authority.

“The energy discount has been a strong contributing factor behind many players choosing to follow the LNG route,” said Edvard Molitor, Environmental Manager at the Gothenburg Port Authority in a press release.

Both the ports in Aarhus and in Gothenburg are currently part of ten ports in the Nordic region behind a declaration that focuses on sustainable port management. The joint declaration expresses a commitment in the region to collaborate on environmental challenges and reducing the carbon footprint of the regional shipping industry.

 

Sources:

Danske Havne (in Danish)

Port of Gothenburg

Port of Rotterdam

 

Photo credit: Mikkel Jönck Schmidt

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