I would advise Tradewinds Equity LLC to raise money from long-term infrastructure investors, the kind that look for stable long-term returns from toll roads, airports, terminals and such. The remit would be to invest exclusively in real green deals, which means no vessels using current propulsion fuels, including LNG (for which there is plenty of money available anyway).

The $1bn question

This article is part of a series written by people across shipping in response to this question about how to deploy a hypothetical TradeWinds Sustainable Shipping Fund:

How, where and why would you invest $1bn for the best return in sustainable shipping, as the industry grapples with the need to cut carbon emissions, improve efficiency and keep cargoes moving in a world facing multiple economic and political challenges? The investment will be made now and ideally held for the next seven years to the end of the decade. As an added bonus, give one policy or regulation you would like to implement from 1 January 2023 to benefit shipping?

Ammonia-ready classification notations and such, or other green costumes, would also not qualify. The fund would need at least 10 to 15-year employment contracts for any vessels financed and would be sparing in using high residual value forecasts to boost return maths. No spot ships welcome, including unfixed wind-installation vessels. I would call it Green Ship Finance Yield International.

The fund would be agnostic on commodity shipping sectors sectors and would be prepared to finance specialised vessels, such as coastal ferries, carbon capture transport vessels, purpose built ro-ros and multipurpose ships — the kind that big industrial concerns will need to turn to for their transport needs to achieve decarbonisation goals.

It is critical that the fund does not make a single fuel bet and be open to the range of alternatives — such as methanol, hydrogen, fuel cells, electric, biofuels and carbon capture — that the industry and the world need as the decarbonisation challenge is pursued. The fund will aim to build a diversified green propulsion fleet on long-term charters to highly creditworthy counterparts.

I would hire a small group of seasoned ship-finance veterans who will be willing to travel up and down the green shipping corridors that emerge and be prepared to bid for the growing list of deals coming to market.

My regulatory change would be a rewrite of the Carbon Intensity Indicator rules to discourage carbon pollution rather than produce regulatory compliance for the sake of regulatory compliance.

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