“Anchors Away!” - Shipping Criteria Sets Sail with an Impressive Fleet of Ferries
Climate Bonds is delighted to present the first Certified shipping project under the Climate Bonds Standard. The New Zealand-based transport operator KiwiRail has Certified a NZD350m (USD246m) loan facility to finance the purchase of two new battery-powered Interislander ferries.
KiwiRail’s Interislander ferry service is an extension of State Highway 1 and the Main Trunk Line across Cook Strait, linking road and rail networks between New Zealand’s North and South islands. The transport operator hails the route as “one of the world's most beautiful ferry journeys” and it is also a popular tourism service.
KiwiRail began the procurement process for two new Interislander ferries in order to replace the current fleet which are reaching the end of their operational lifetime. The new ferries are being built by Korean shipyard Hyundai Mipo Dockyard. The first arrives in 2025 and the second in 2026, enabling a smooth changeover as the older fleet is retired.
KiwiRail attained Certification under the Climate Bonds Standard by demonstrating a clear path for fuel and propulsion systems to achieve zero carbon emissions by 2050, which supports the environmental objectives of both KiwiRail and the New Zealand Government.
KiwiRail Group Chief Executive Greg Miller triumphantly welcomed the new and innovative emissions-slashing design:
“Through smart design of the hull and machinery space, the new ferries have been future-proofed to allow us to increase battery use over time so we can run entirely on battery and shore power, or to use other low-carbon fuel sources as they become commercially available and have a reliable supply line”.
Shipping Criteria: A Voyage with a Vison
The expansion of the Climate Bonds Standard into the Shipping Sector is part of a vital mission to support the decarbonisation of global trade. Maritime transport accounts for approximately 80% of global trade by volume and 70% by value; in 2017, total volumes transported reached 10.7 billion tonnes.
Climate Bonds’ Shipping Criteria were approved by the Climate Bond Standards Board (CBSB) in October 2020 after a year of development and consultation work. This landmark issuance from KiwiRail is a wonderful manifestation of the Criteria’s purpose of inspiring the industry’s efforts at climate impact mitigation.
CO2 is the largest source of greenhouse gas emissions in shipping accounting for 98% of Industry’s Greenhouse Gas (GHG). Emissions According to the International Maritime Organisation (IMO), the shipping industry’s governing body, the sector currently accounts for approx. 2.2% of global emissions.
Climate Bonds CEO Sean Kidney welcomed the Certification, "Rapid decarbonisation of transport is vital for emissions reduction, with shipping being a critical part of the sector. This world-first Certification for shipping by KiwiRail and their partners marks the adoption of international best practice for green finance, and they are to be congratulated."
The Last Word
We would like to thank EY for their incredible support in verifying this project. Our verifiers play a crucial role in the delivery of the Certification Scheme.
The Climate Bonds Standard and Certification Scheme represents best practice for green debt labelling. The Scheme is used globally by bond issuers, governments, investors and financial markets to prioritise investments which genuinely contribute to addressing climate change.
The Climate Bonds Standard has been expanded to now include Electrical Grids and Storage Criteria, and further expansion is intended to include instruments beyond use-of-proceeds bonds, including SLBs and similar (e.g., Sustainability Linked Loans - SLLs). Consideration is also being given to the certification of companies (i.e., not in association with any particular financial instrument) read our latest discussion paper.
Climate Bonds has now Certified USD185bn worth of bonds under the Certification Scheme.
You can visit our Database to view the full list Certified issuances.
‘Til Next Time,