Green tonnage tax incentives — the first of their kind in the European Union — are just one of several innovative measures taken by Cyprus to boost the competitiveness of its flag and maritime industry.
The incentives apply to vessels attaining an energy efficiency design index (EEDI) that is better than the minimum prescribed under the rules of the International Maritime Organization. Depending on the degree that ships outperform their required EEDI, the tonnage tax reduction ranges between 5% and 25%.
“Once this is implemented full-scale, it will give us the opportunity to know the percentage of our fleet that is moving in the right direction,” Vassilis Demetriades, the country’s deputy minister in charge of shipping, said in an interview with TradeWinds.
Cyprus, an EU member state, obtained the green light to offer such incentives at the end of 2019 when European competition authorities extended the island nation’s tonnage tax regime for 10 years.
Beyond green tax incentives, Cyprus backs a trial programme to help ships under its flag test biofuels and has spent €10m ($10.7m) supporting innovative projects related to the green or digital perspective of shipping.
These are just part of a wider set of measures pursued by the country since it set up an autonomous deputy ministry in charge of shipping exactly five years ago.
According to Demetriades, the ministry has delivered on most of them — including on a new mindset to deal with port state controls.
“We are signalling the need to convert ... fines to online training for the crew on board,” he said.
A further initiative is a one-stop shop that ensures that shipping companies wishing to establish there are doing the related paperwork directly through the shipping ministry rather than through the regular company registration office that handles all other businesses.
That paperwork itself is becoming increasingly digital.
According to Demetriades, the shipping ministry signed a contract a few months ago to become fully digital. In a few days, a new mobile app will be launched on which shipping companies will be able to request and download all kinds of certificates.
