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The Panama Canal Authority has announced a new “Green Ship Classification” which will see lesser polluting vessels charged reduced tariffs for passing through the waterway, in a scheme that is intended to radically reduce greenhouse gas emissions.
According to Ricaurte Vásquez, the administrator of the Panama Canal, the move will see a new “Greenhouse Gasses Tariff” introduced and contribute to a more sustainable future for the interoceanic channel.
The introduction of the Green Ship Classification comes “in recognition of the urgency of climate change and the need to accelerate industry and global climate action,” Vásquez was reported as sayingIn a Press Release from the Authority.
Panama Canal has a significant economic impact on Panama. It generates nearly 6% of the country’s GDP and is an important piece of infrastructure that supports the international shipping industry.
Each year, an estimated 14,000 cargo vessels pass through the Canal, which reduces transit between the Atlantic and Pacific Oceans by up to 8,000 nautical miles — more than 10 days of travel for many container ships.
SEE ALSO Form an Offshore Company in Panama: What You Need to Know
The new Green Ship Classification will see eligible vessels will only apply to ships over 125 feet long (38.1 meters), and will be based on three factors, including energy efficiency built into the ship’s design, employment of efficiency promoting measures such as bow thrusters, and the use of more sustainable fuel sources, including zero carbon biofuels and other carbon neutral fuels.
According to Vásquez, the introduction of the Green Ship Classification is intended to reduce greenhouse gas emissions during transit through the Canal by between 20% and 100%.
Just months after Panama Canal Authority, the Green Ship Classification was introduced. launched a scheme to make the waterway carbon neutralIt is expected to play a major role in the 2030 effort.
Panama is one of the most popular destinations in Latin America and the Caribbean for foreign investors, partly due to the Central American country’s famously secure and secretive banking sector, including one of the most well-known off-shore banking regimes.
This country is well-known as being politically stable. having some of the lowest violent crime statisticsThe region. The region has seen significant economic growth over the past century. GDP is now only 5%. declining in the face of the COVID-19 pandemic.
With the World Bank predicting that Panama would register 9.9% GDP growthBy 2021, the country will be the fastest-growing economy in the region. This will be made more sustainable by the Green Ship Classification.
Panama is well-known for its extremely pro-business regime, with the country given a very high score of 92.0 in the World Bank’s Doing Business 2020 report — positioning it as one of the best countries in the world to do business.
Meanwhile, with FDI hitting $6.07 billion in 2019, it was recognized in the UN’s 2020 World Investment ReportYou will receive more foreign direct investments (FDI) from Central America than any other country.
While the country’s main export commodities include refined petroleum, chemicals, bananas, gold, and ships, the country is becoming increasingly well-knownAs a center for innovation with an abundance of tech workers and developers.
As the world becomes more aware of climate change, so is the international shipping industry responsible for emitting an estimated 940 million tonnes of carbon dioxide per year, the Panama Canal’s Green Ship Classification promises to be an important tool in the fight to promote a more sustainable future for the world.
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