FEET adopts Singapore-Asia Taxonomy to back vessel retrofits

The Fund for Energy Efficiency Technologies (FEET) has become the first to adopt the Singapore-Asia Taxonomy for Sustainable Finance (SAT), a move that links 100% upfront financing for vessel retrofits to a verified, audited methodology for fuel savings.

The Global Centre for Maritime Decarbonisation (GCMD) confirmed on 11 November that the fund will use the second edition of the SAT to guide investment decisions. The revised criteria recognize energy efficiency technology (EET) installations that deliver measurable greenhouse gas emissions reductions in hard-to-abate sectors.

FEET, managed by AIM Horizon Investments and supported by the Development Bank of Japan, DBS Bank, and ING, operates a pay-as-you-save mechanism. GCMD serves as the fund’s decarbonisation advisor. To support these investments, Lloyd’s Register (LR) has completed an independent review of GCMD’s methodology for quantifying fuel savings from Wind-Assisted Propulsion Systems (WAPS).

The methodology was developed using 276 million data points collected over four months from the MV Pacific Sentinel, a vessel operated by Eastern Pacific Shipping. By screening more than 3,000 on-off transitions, GCMD isolated 203 instances where operating conditions were constant, allowing fuel savings to be attributed specifically to wind sails rather than external factors.

Why it matters

This development bridges the gap between technical promise and bankable projects. For shipowners, the primary hurdle to retrofitting has been the uncertainty of real-world performance. By aligning a 100% upfront financing model with an independently reviewed methodology, FEET removes the capital expenditure barrier while providing a data-backed guarantee that the technology performs as advertised.

The adoption of the Singapore-Asia Taxonomy provides a credible regulatory framework for lenders. Banks like DBS and ING now have a standardized benchmark to classify these investments as sustainable. This likely lowers the cost of capital for owners looking to install WAPS or other EETs, as the projects now fit within a recognized transition taxonomy supported by the Monetary Authority of Singapore.

The pay-as-you-save structure shifts the performance risk away from the shipowner. Because payments are determined by verified savings, the financial obligation scales with the actual efficiency gains. This creates a direct link between operational data and debt servicing, making efficiency upgrades a cash-flow-neutral or positive proposition from day one.

What to watch

The next trigger will be the first WAPS projects financed under this framework, where fuel savings assumptions and data collection protocols will be contractually agreed upon by all parties. These projects will require independent verification of calculated savings to determine the final payments made by shipowners under the pay-as-you-save mechanism.

Source: Manifold Times