Key insights from SPNL’s Sustainable Ship Finance Seminar: Navigating the Future of Maritime Investment
With thanks to Trainee Solicitors William Ford and Melissa Diaz for their insight

As the maritime industry faces mounting pressure to decarbonise and align with global sustainability initiatives, financing strategies must keep pace.

The challenges associated with doing so were explored at the Shipping Professional Network in London’s (SPNL) latest seminar, “Sustainable Ship Finance, Navigating the Future of Maritime Investment”, hosted by Campbell Johnston Clark (CJC). The discussions featured insights from panellists Union Maritime, BloombergNEF and S&P Global, and moderated by CJC.

Catalysts for change in competitive lending 

The competitive landscape in ship finance is shifting rapidly. Traditional bank lenders now compete with leasing houses and investment funds offering higher leverage and greater flexibility. This influx of alternative financing has created multiple routes to obtaining funding, driving down the overall cost of borrowing and making funding more accessible. 

Unlike traditional banks, these new entrants often impose less stringent borrowing requirements, reducing barriers for shipowners. As a result, shipowners are increasingly able to pursue newbuild projects – many of which incorporate advanced technologies and sustainability features – rather than relying on older, less efficient vessels. This dynamic is not only reshaping the market, but is also acting as a catalyst for investment in greener fleets. 

Green financing: Promise vs practicality 

Sustainability-linked loans remain the most visible green financing tool, offering margin reductions when shipowners meet specific KPIs. The reality is more complex. Reporting requirements are onerous, KPIs are strict and the financial benefit – typically 5-15 basis points – only becomes meaningful in large-scale projects. Whilst initiatives such as the Poseidon Principles provide a framework to analyse the emissions from customers’ vessels, uncertainty persists around how banks apply their decarbonisation principles to shipping. We have assisted Citibank N.A and BNP Paribas a $2.8bn sustainability and gender diversity-linked facility to GasLog Ltd and ABN AMRO on a $200m sustainability and gender diversity linked loan to Navigator Gas L.L.C.

Heavy disclosure obligations have reduced the interest in green bonds, with issuers facing rising compliance costs and reporting complexity. In contrast, leasing markets are showing greater appetite for financing new assets - particularly fuel-efficient vessels – underscoring renewed confidence in newbuilds and a preference for flexible financing structures. 

Regulatory uncertainty and geopolitical risk

Shipowners typically look at newbuilds as 25-30 year investments. Such long-term investments must account for evolving regulatory frameworks such as EU ETS and FuelEU Maritime, which impose carbon costs regardless of the discharge location. These measures can add 5-6% to total freight costs, influencing asset competitiveness and investor confidence.

Regulatory arbitrage remains a concern, particularly with shadow fleets, as ships shift between jurisdictions with differing compliance obligations. Geopolitical instability – from sanctions to trade wars – further complicates the picture, leading to increased insurance premiums and risk profiles for high-value assets. 

The cost of inaction

The financial risks of non-compliance are clear: carbon penalties, the potential for stranded assets and/or diminished charter opportunities. Whilst many shipowners continue to heavily rely on debt, deleveraging trends and cautious equity injections reflect a market in transition. The consensus of the panel was clear – proactive investment in cleaner fleets and compliance strategies is essential to secure long-term viability in an increasingly regulated and sustainability-driven environment. 

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