In-depth | STATE AID
building specialist vessels, and the German shipbuilding market never concentrated on building long series of vessels to the same specifications. Reinhard Lueken, secretary general of
the Community of European Shipyards’ Associations (CESA), said that in CESA’s submission, the organisation was, of course, promoting a prolongation of the framework. However, he said CESA believed that the framework should be given a different title. Te title ‘Framework to state aid for shipbuilding’, he believed, seemed to indicate there was state aid to shipbuilding “and that is not actually the case at all”. Dr Lueken said: “the level of support to shipbuilding is probably among the lowest if you compared it to other industries”. Te difference was that shipbuilding had
a separate sector-specific piece of legislation. When compared with the state aid guidelines for maritime transport, he said: “they are much more generous, they provide much more support instruments than the shipbuilding framework. Te shipbuilding framework is relatively restrictive.” Dr Lueken said that the first point
CESA was making was the title should be: ‘Framework for the application of EU state aid rules to the shipbuilding sector’ because “that is what it is”. Te only instrument that has grabbed people’s attention is innovation aid, Dr Lueken explained. Innovation aid is applicable in principle
to all other sectors as well “there is a horizontal rule for that”. Te problem with the horizontal rule, he said, is that it cannot be applied “one to one in shipbuilding”. He explained that also under the horizontal rule for prototype developments, the prototype
can be sold but the sales revenues must be deducted from the eligible costs, those that are fundable. For example in the case of a microchip, the
cost of development is €1 million you could sell the prototype for say €20 and deduct them from your eligible costs, which would make no difference. In the case of a ship the eligible costs are a fraction of the total ship price. “You sell the ship and then you deduct the revenues from the eligible costs. It is not workable. Te fact that we do not have series production and we are always selling our prototypes is one of the main reasons why the horizontal cannot be used and that is the reason why the EU introduced the innovation aid in the shipbuilding framework in the first place.” Tese basic circumstances have not changed therefore Dr Lueken said that he was optimistic that the EU would come to the same conclusion as before. Dr Lueken said he would expect the
responses to be reasonably limited as part of the consultation process and then would do the full impact assessment. He expected to see what was proposed “sometime in the spring”. He was optimistic that innovation aid would be prolonged. A number of other proposals have been made, notably on the description of ship types. One example is those involved in inland
navigation. Many of the definitions used are 20 years old, he said and in the case of inland waterway vessels the “global competition has changed”. Before there was little competition in building these vessels and this was no longer the case. “In terms of innovation we need a lot on inland navigation vessels. Why should that be excluded?”
Another example is the vessel has to
be self-propelled. If you have a non self- propelled vessel for the installation of offshore wind farms, why should it be excluded as it could be a very innovative piece of equipment? Dr Lueken asked. “Te definitions in the shipbuilding framework are 20 years’ old, or older, and they have never really been looked at. Since this is a more extensive review you can look at the corners that have not been touched for a while and see if they are still appropriate.” CESA also considers there is a lot of
scope to support the maritime industry in its endeavours to improve environmental performance. He feels this should be highlighted, so people are made aware that the instrument already exists and they can use it. “One way would be to have some more explicit wording in the shipbuilding framework.” A “strong justification” will be needed if
the framework is to be retained, Holman Fenwick Willan says. “Te Commission states that it would
like to assess, in particular, to what extent the current innovation aid rules are appropriate for promoting greater efficiency and competitiveness of EU shipyards. It asks whether innovation aid is necessary for the construction of prototypes and whether it should be redirected to the construction of ‘greener ships’. Irregular implementation by government and the diversity of shipyard portfolios has meant that the success of innovation aid in the sector has been mixed. “Te need to ensure a level playing field
with Asian shipbuilders should also be a prominent consideration.” NA
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