This is a positive development – state aid is a tricky thing, even when the competitiveness of the own industry is only a secondary effect of the state aid.
The European Commission has found amendments to an existing Finnish scheme supporting investment in cleaner ships to be in line with EU state aid rules. In particular, the amendments aim at giving ship-owners incentives to use less polluting fuel, ahead of the entry into force of EU standards to that effect.
Obviously, this scheme is to mediate the impact of the Sulphur Directive, and as such is to be applauded. The fact that the EC approves this scheme is an important moment in the Finnish debate on the impact of the Sulphur Directive, as the industry still insists that the Finnish state should do more to diminish the impacts. From the original decision on this scheme (from 2011) we can see that this investment support is not quite negligible:
2.3.5. Aid intensity
14. In line with the provision of the Environmental guidelines, aid granted by virtue of the
present scheme may total a maximum of 50 per cent to large enterprises, 60 per cent to
medium-sized enterprises and 70 per cent to small enterprises of extra investments
included in the vessel project6. The maximum aid rate may be increased if the project
meets the definition of eco-innovation as defined by the above said guidelines.
41. The Commission notes furthermore that the scheme is open to all operators in a nondiscriminatory
In other words, it is not only open to Finnish operators, but to all operators. This is an obvious requirement, because otherwise it would be totally discriminatory. And, as said, this state aid can be used either for new vessels or upgrading old vessels. Thus, this can be seen as an important incentive to invest in new technology – whether through new ships or updated technology.
I expect, nonetheless, that the Finnish industry will not be satisfied with this. I assume that transport of the industry’s products is not done by the companies themselves but by specialized transport companies. So for the Finnish industry, this means they have to consider whether they change contracts now to companies which invest in clean ships, with the aid of this state aid scheme or whether they will pay much more for transport starting from 2015, when the Sulphur Directive enters into force.