In recent years, Turkey has undertaken significant initiatives to advance its maritime industry and ensure the ongoing dynamism of its fleet. With this objective in mind, amendments have been made on 23 March 2024 to the Regulation on Incentivizing Construction of New Vessels to Replace Scrapped Turkish Flagged Vessels (“Regulation”). This regulatory framework is dedicated to ensure the safety and sustainability of the Turkish fleet through the rejuvenation of its vessels. Each year, incentives are given to the owners of Turkish flagged vessels meeting the regulatory requirements, thereby encouraging the decommissioning of older vessels and promoting the construction of new ones. Our previous client alert on the subject can be accessed here.

Prior to the amendments, only the owners of the vessels of up to 5,000 GT could benefit from the incentive under this Regulation. With the recent amendment, this limit has been increased to 50,000 GT. Among the eligible applicants, ten vessels to be scrapped each year are selected and the owners are given incentives for the construction of new vessels. The incentive to be granted is particular to each vessel, taking into consideration factors such as tonnage and fuel type.

Furthermore, revisions have been made to the documentation required from owners eligible for incentive payments, aimed at streamlining the process for increased efficiency.

Finally, the timeframe for vessel owners to secure a contract for the construction of a new vessel, which is one of the conditions of eligibility for the incentive, has been extended. Thus, owners now have a better opportunity to engage in negotiations with shipyards, facilitating comprehensive assessment and comparison of offers. This extension allows for more thorough decision-making and potentially better deals for the owners.

If you have any questions on or require clarification about this alert, please do not hesitate to contact us.