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Indian government to finance green shipping projects

Indian government to finance green shipping projects

In a move to accelerate the green transition of Indian shipping, the Ministry of Ports, Shipping, and Waterways (MoPSW) on Monday announced that it will cover a third of the finances for green shipping projects in the nation.

The Centre under financial assistance for the shipbuilding scheme, will provide 20 per cent (with 3 per cent reduction each year) of funds for all vessels built by the industry. For green shipping, this will now be raised to 30 per cent of the project cost to incentivise the construction of vessels running on alternative fuels.

“The primary aim is to let the shipbuilding industry know that green ships will be prioritised,” it said.

“Since the announcement is new, we only have the broad contours of the policy. We are yet to formulate the whole policy. Issues like yearly reduction, types of fuels covered under the policy, etc will be put in the fine print,” said a senior government official who was a part of the deliberations adding that the green funding policy will only apply to vessels and not allied infrastructure.

The decision which was taken at MoPSW’s annual Chintan shivir, chaired by Union Minister Sarbananda Sonowal, aims to get the wheels moving for India’s shipbuilding industry.

It was not immediately clarified whether there would be a new fund created for this scheme or whether the ministry would utilise the residual funds from the existing Rs 4,000-crore shipbuilding assistance scheme.

So far, INR 241 crore has been used up from the entire fund for shipbuilding assistance — which is barely 6 per cent. The scheme’s operational period ends in three years.

The ministry also decided to accelerate its Green Tug Transition Programme. Four state-owned ports — Jawaharlal Nehru Port (Navi Mumbai), VO Chidambaranar Port (Tuticorin), Paradip Port (Paradip in Odisha’s Jagatsinghpur district), and Deendayal Port (Kandla) — will procure two green tugboats each.

Meanwhile, Deendayal Port and VO Chidambaranar Port will be developed as green hydrogen hubs over the next fiscal year. Moreover, a single window system will be introduced to monitor river and sea cruises.

Sonowal was quoted by the ministry as saying he would review the progress with respect to these targets in a mid-year chintan after a few months and mentioned strict action may be taken in case of delay in the completion of the project.

Earlier this month, the Centre also launched the Green Ports Policy, under which ships using cleaner fuel and vessels may get priority berthing, along with 50 per cent electrification in all 12 of the Centre’s major ports, which would be increased to 90 per cent in 2047.


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