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Cyprus shipping making waves – report

Cyprus shipping, the steady driver of the economy, is sailing for better times, having survived the war in Ukraine almost unscathed and adapting to new challenges.

Marking five years since the establishment of the dedicated Shipping Deputy Ministry, Vassilios Demetriades said the maritime sector had enjoyed growth, with the Cyprus flag attracting more shipping companies and the state earnings higher revenues.

The Deputy Minister said the two main challenges for his department are innovation and climate solutions.

The digital transformation and the SDM’s paperless environment for shipping services will be completed by May 2024, with the first deliverables in the first two months of this year being a mobile app, the e-Helpdesk, and the e-Maritime library.

These will help to process applications faster, ensure transparency and operate on multiple channels, while the digitisation process, as part of the “one-stop shipping shop” co-financed by the EU’s NextGeneration Recovery and Resilience Facility (RRF), will speed up the incorporation of shipping companies.

One key innovation is the introduction of the Shipping Limited Liability Company (SLLC), which aims to improve the Cyprus flag’s competitiveness and simplify procedures for Cypriot shipping companies that own Cyprus ships.

One of the junior ministry’s biggest achievements was the extension and its endorsement by the European Commission of the Cyprus tonnage tax system for a further decade, up to December 2029, in addition to the abolition of registration and mortgage fees for ocean-going commercial ships, and the streamlining and simplification of fees and dues.

Demetriades said that 23 of the Deputy Ministry’s 35 sustainable actions have already been completed or are in their final implementation stage, while greener shipping is next on the agenda.

The introduction of Green Tax Incentives will help Cyprus, and the shipping sector, reduce greenhouse gas emissions and meet the Commission’s emission targets for 2030 and 2050, while shipowners are encouraged to conduct trials using alternative fuels, such as biofuels and hydrogen.

At the international level, Demetriades said Cyprus is “actively involved in the EU and IMO deliberations to achieve emissions reduction targets, including using cleaner fuels, electrification of ships and the use of energy efficiency technologies.”

Zero emissions

He said Cyprus is also a signatory to the ‘Declaration on Zero Emission Shipping by 2050’ and the ‘Green Shipping Challenge’ initiative launched at the UN climate change conference (COP27) in Egypt’s Sharm el Sheikh in November.

The SDM is active in establishing a home-grown research and innovation culture and breaking gender stereotypes, while on the education front, it has already secured about €1.5 mln in onboard training subsidies and scholarships to about 940 cadets and marine academy students.

As a result, Cypriot students at marine academies in Cyprus and Greece have grown from 128 a decade ago to 320 in 2022.

Dealing with the fallout from the coronavirus pandemic, Cyprus played a pivotal role in reaching out to seafarers stranded on board ships and was among the first calling for the relief of crew and providing critical Covid-19 vaccines to the 55,000 people working on board Cyprus-flagged ships, as well as those onboard Cyprus-managed vessels.

Another crisis that Cyprus helped to resolve during the past year was the issue of bank accounts held by Ukrainian or Russian nationals, unrelated to the war in Ukraine, who could not get paid as their home accounts were based in Russia and frozen.

New bank accounts

Cyprus approached electronic money institutions and assisted those working on board Cypriot-owned or Cyprus-managed ships to open new accounts.

Next on the agenda is the expansion of the maritime cluster, currently boasting 302 resident companies providing the full range of shipping activities, from 97 a decade ago.

Demetriades added that Cyprus is also in the process of becoming a centre for the arbitration and mediation of maritime disputes.

Although Cyprus is the largest third-party shipmanagement centre in Europe and among the top three worldwide, enhancing its fleet is just as important.

The maritime cluster contributes 7% of the island’s GDP, while the SDM’s direct annual revenues have nearly doubled in ten years, from €9.42 mln in 2012 to €15.6 mln last year.

The shipping industry accounts for 9.5% of the EU fleet and 1.7% of the world fleet, with 1,700 ships and a gross tonnage of 23.8 mln, of which 1,100 are ocean-going vessels.

And this, despite the sanctions imposed on Russian-owned vessels due to the invasion of Ukraine, which saw vessels with some 2 mln GRT struck off from the Cyprus register.

On the other hand, Cyprus proved to be an attractive and reliable flag to re-register other ships.

New additions include Royal Caribbean’s ‘Spectrum of the Seas’, which re-registered from the Bahamas to the Cyprus flag, coinciding with the opening of a dedicated office in Limassol later this year to manage and oversee the cruise giant’s eastern Mediterranean operations.

Other recent newcomers to the Cyprus fleet include the world’s fourth largest oil tanker company, Frontline, based in Bermuda and controlled by John Fredriksen, a naturalised Cypriot citizen, who decided in December to register its fleet under the Cypriot flag.

Meanwhile, in 2019, two of P&O Ferries’ six vessels registered under the Cyprus flag as the British cross-Channel operator activated its Brexit plans to mitigate the impact of a disorderly departure from the EU.

Later the same year, Greek ship owner and operator Angelakos (Hellas) SA said it registered all eight newbuild cargo vessels under the Cyprus flag following their delivery from shipyards in China.

Source: Financial Mirror

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