Japanese shipping major Nippon Yusen Kaisha (NYK) has announced plans to issue transition bonds in late November in an effort to accelerate its decarbonization projects.

As explained, transition bonds are designed to facilitate the transition to a low-carbon society. This marks the company’s fifth issuance of such bonds, showing the evolving role of this financial instrument in the shipping industry.

Specifically, the company’s transition bonds will have a maturity of five years and the issued amount will be about JPY 20 billion (around $130 million).

“The funds raised will be allocated to projects aligned with our medium-term management plan, Sail Green, Drive Transformations 2026 — A Passion for Planetary Wellbeing. These projects emphasize long-term transition strategies that contribute to decarbonization, including investments in LNG-fueled vessels,” NYK said in a statement.

As part of its Vessel fuel conversion scenario towards 2050, the Japanese carrier aims to promote conversion to optimal fuels to maximize greenhouse gas (GHG) emissions reduction (total volume) by 2050. The near-term plan is to expand the number of LNG-fueled ships by 2030 and maximize the use of the latest GHG reduction technology. In the long term, the company plans to make a shift to ammonia-fueled vessels and select optimal fuels based on vessel characteristics.

Since issuing the shipping industry’s first green bonds in 2018 and subsequently Japan’s first transition bonds in 2021, NYK says it remains committed to sustainable finance.

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