Possible future protocols to the Cape Town Convention on ships and on renewable energy equipment

The Unidroit Convention on International Interests in Mobile Equipment (Cape Town Convention), together with the four existing Protocols thereto (Air, Rail, Space and MAC Protocol), is regarded as being one of the most ambitious and successful international conventions in the area of private law. The enormous success of the Cape Town Convention system, particularly in the aircraft sector, has motivated the idea of extending this system to other types of equipment that are not covered by the existing Protocols. The underlying expectation is that the legal certainty and strong creditor protection afforded by the regime of the Cape Town Convention could allow the reduction of borrowing costs and support much needed investment in high-value assets of industries such as the green energy market, which will be crucial for achieving the climate protection goals set in the Paris Climate Accords. Also from Unidroit’s institutional perspective, the preparation and adoption of additional Protocols to the Cape Town Convention would ensure that Unidroit could continue to fulfil an important role in the advancement of the unification of private law worldwide. With the institutional expertise built over three decades of work on secured transactions, Unidroit is exceptionally well-placed to lead the extension of the application of these principles to new industry areas. The development of the MAC Protocol has proven that Unidroit can adapt the Cape Town Convention system to the specific requirements and peculiarities of industries that were not contemplated within the original scope of the Cape Town Convention when it was adopted more than 20 years ago. However, it will also have to be considered that the asset-based financing system under the Cape Town Convention will not be suitable for all potential types of assets and types of financing. New international instruments can only succeed if there is support from the market and existing organisations in the relevant industry. In this chapter, it is argued that if these conditions are secured, there are good chances of success for the possible future protocols on ships and renewable energy equipment which are currently under discussion.