Clearing the Air & the Seas: Sustainability Efforts in the Shipping, Yachting & Aviation Industries

Clearing the Air & the Seas: Sustainability Efforts in the Shipping, Yachting & Aviation Industries

In the last year, BDO Malta’s legal team actively participated in various seminars, talks and conferences related to shipping, yachting, and aviation sectors.

Conferences attended by representatives of BDO Malta include the Corporate Jet Investor Conference and Superyacht Investor Conference, held in London in February 2023 and March 2023. In March, BDO Malta also attended the Opportunities in Superyachts Conference and the Opportunities in Business Jets Conference, organised by Quay Communication Limited and held in Malta. During the Opportunities in Business Jets Conference, Dr. Giannella Barbieri, Legal Manager at BDO Malta, participated in a panel discussion which discussed the future of business aviation and the technology trends to look out in 2023.


An important and recurring topic which is being discussed at length, at each event, is that of sustainability. Sustainability has become an increasingly important topic in the shipping, yachting, and aviation industries, as these sectors have a significant impact on the environment. The subject of sustainability has gained popularity over the past years as stakeholders involved in these industries put in their efforts to meet governmental and institutional objectives in response to growing environmental concerns. Numerous policies and action plans have been developed to educate people and increase awareness about the damage inflicted on the environment. These policies and action plans also aim to combat the negative impacts that human activities resulting from these industries have on the natural world, and to promote more sustainable practices that protect the environment for future generations. In fact, new laws and regulations continue to be implemented to mitigate these harmful effects on the environment.


The United Nations have defined sustainable development as  “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”


The Aviation Industry

The aviation industry is working towards decarbonising the industry by reducing carbon emissions to zero by 2050, which will achieve the aim of the Paris Agreement to limit global warming to 1.5C. The aviation industry is pushing towards the use of sustainable aviation fuels (SAFs) which reduce CO2 emissions by up to 80% when compared to fossil fuels.


“Sustainable Aviation Fuel can be produced from a number of sources (feedstock) including waste oils and fats, green and municipal waste and non-food crops. It can also be produced synthetically via a process that captures carbon immediately from the air.”


The Fit for 55 Package includes the ReFuelEU Aviation Initiative which is a proposal that promotes the use of SAF on all flights departing from airports within the European Union. The regulation would require fuel suppliers to blend sustainable aviation fuels into existing jet fuels for all EU and non-EU airlines departing from EU airports. This proposal aims to ensure that the jet fuel required to operate the flight does not go beyond what is actually required and hence avoid fuel tankering. Ultimately, non-adherance may result in financial penalties.


The Fit for 55 Package is a set of legislative proposals adopted by the European Commission as part of the European Green Deal, with the aim of reducing emissions by at least 55% by 2030 and making Europe the world’s first climate neutral continent by 2050.


Although the use of SAFs has already initiated, issues remain as it is currently more expensive to produce when compared to regular jet fuels, even though oil prices have drastically increased over the years. For these goals to be reached, the industry has to look at ways at how production of SAFs can increase or even find ways as to how new SAF types may need to be developed.  The use of SAFs would ensure the sustainable growth of air transport without affecting the fuel delivery system or aircraft engines. The revision of the Energy Taxation Directive is a further proposal which will change the way energy products are taxed in the EU to address the negative effects of energy tax competition. In the aviation sector, any outdated exemptions and incentives for the use of fossil fuels will be eliminated through this proposal, while cleaner technologies will be promoted. As a result, such a proposal will aid in the transition from the use of fossil fuels to cleaner fuels, thereby reducing the greenhouse gas emissions.


Shipping and Yachting Industry

The International Maritime Organisation (IMO) has aimed to reduce a ship’s carbon intensity and improve ship efficiency through its commitment to reduce the emissions of greenhouse gases from shipping by at least 50% by 2050 and having a 40% efficiency gain by 2030. It is also aiming to innovate energy-efficient technologies linked to the UN Sustainable Development Goals. The International Convention for the Prevention of Pollution from Ships stipulates legally binding international standards to reduce emissions and discharges generated by ships. The IMO has introduced a 0.50% mass by mass limit for sulphur in fuel oil used on board ships, which continues to emphasise their commitment for sustainability as well as resulting in health and environmental benefits. These industries are also taking a sustainable approach towards reducing the use of fuel by ships using onshore electricity when at berth or the use of alternative fuels. Moreover, the EU has also enacted the Ship Recycling Regulation with the aim to reduce the negative impacts linked to recycling of ships by making sure that vessels are dismantled in the proper method for safe disposal or recycling of all ship components, including any hazardous materials. The shipping and aviation industries are taking steps to improve sustainability, both on a national and international level, which will have a positive impact on the environment and quality of life.


What is Malta doing in terms of sustainability?

In January 2023, the Minister for Transport and Capital Projects in Malta announced the implementation of a Civil Aviation Policy for Malta. This policy has identified five long-term strategic policy pillars with one pillar being focused solely on sustainability. Although this pillar is not solely focused on environmental sustainability, one of Malta’s priorities in the near future is to facilitate the availability of sustainable aviation fuel (SAF) and implement a blended mandate for its use. This aligns with the nation’s commitment to promote greater sustainability in its airports, by enhancing environmental performance and improving flight efficiency.


With respect to the shipping and yachting industry, Malta has introduced the Grand Harbour Clean Air Project, which will enable vessels to switch off their engines when berthed and connect directly to the national grid by using shore-side electricity points to power their on-board services. This will reduce air pollution and improve the quality of life for people living close to the harbour. The 2023 financial budget of Malta has included investments in this sector to further advance the development of such resources. This will aid Malta to reduce the negative impact on health, natural environment, infrastructure, and agriculture, as well as contribute towards the EU's and national climate change objectives.


Why Malta?

Malta is widely recognised for its robust shipping and yachting industry, which is evident in the country’s position as a global leader in shipping registration. This reflects the nation’s commitment to fostering a strong maritime sector and promoting excellence in this field. While the shipping and yachting industry may be regarded to be at the forefront of the transport industry, the aviation industry is strongly following suit, as the aircraft register in Malta continues to witness an exponential growth in aircraft registrations, year after year. Not only has Malta’s geographical location drawn the attention of various investors but, there are numerous advantages to having one’s aircraft or vessel registered in Malta, such as competitive registration fees, being a member state of the European Union and a signatory to reputable international conventions, various fiscal incentives, a skilled workforce and ample resources, amongst others.


It is evident that Malta’s ongoing efforts to implement policies and pursue strategic objectives are further reinforcing the country’s status as a preferred jurisdiction for registering vessels and aircraft. This demonstrates Malta’s commitment to providing a favourable environment for businesses in the maritime and aviation industries, as well as its dedication to maintaining a strong regulatory framework.


How can BDO Malta help?

BDO Malta has a fully-fledged legal team who can assist and support clients with registering their ships, yachts or aircraft in Malta as well as to provide the necessary legal advisory in relation to financing, sale and purchase transactions, crew matters and any operational issues.


Interested to find out more?

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