European Commission Ruling Gives Finnish Owners Incentive for Cleaner Ships

The European Commission has approved an initiative that gives Finnish ship owners an incentive to build and convert existing ships to the use cleaner burning fuel ahead of future regulation deadlines.

Specifically, 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 allow, under certain conditions, shipowners to finance the acquisition of new ships or the adaptation of old ships, provided they operate under stricter environmental standards than currently in force in the EU.

The European Commission determined that the aid provides a real incentive to ship owners and is necessary in helping the EU reach its goal of bringing forward by up to two years the use of less polluting fuel in ships.

Joaquín Almunia, Commission Vice President in charge of competition policy, said: “This Finnish scheme demonstrates how the current state aid rules can be used for encouraging the maritime industry to adapt to stricter environmental rules ahead of their entry into force”.

The Commission authorized the initial Finnish scheme in 2011 (see case SA.32118) before the Commission adopted a new Sulphur Directive 2012. The amendments notified by the Finnish authorities aim at adapting the existing scheme to the more stringent rules on sulphur limits in marine fuel that will apply as from January 1, 2015 in the Sulphur Emission Control Area (SECA) which includes the English Channel, the North Sea and the Baltic Sea.

No aid will be granted after the new standards enter into force.

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