EU approves €570 million aid for emission cuts in Italian ports

European Commission greenlights $600 million Italian state aid to cut emissions in ports

The European Commission has approved, under EU State aid rules, a €570 million ($609.6 million) Italian scheme to incentivise ships to use shore-side electricity when they are at berth in maritime ports.

The measure contributes to reducing GHG emissions, air pollution and noise in line with the objectives of the European Green Deal.

Under the scheme, aid in the form of a reduction of up to 100 per cent of ‘general system charges’ in electricity prices is aimed at financing public policy goals, such as renewable energy. This reduction is expected to lower the cost of electricity for ship operators purchasing shore-side electricity, making it competitive with onboard electricity production using fossil-fueled engines.

By lowering the cost of shore-side electricity for ships, the measure aims to incentivise ship operators to opt for a more environmentally friendly electricity supply, thereby avoiding significant GHG emissions, air pollutants and noise emissions. Initially, the reduction will cover 100 per cent of the general system charges.

The scheme will run until 31 December 2033.

The Commission assessed the scheme under EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the European Union, which enables Member States to support the development of certain economic activities subject to certain conditions, and the Guidelines on State aid for climate, environmental protection and energy (CEEAG), which allow Member States to support measures reducing or removing CO2emissions.

The Commission found that:

  • The scheme is necessary and appropriate to incentivise the use of shore-side electricity, thereby reducing GHG emissions and increasing the level of environmental protection.

  • The scheme has an “incentive effect”, as the beneficiaries would not use shore-side electricity without public support.

  • The scheme has a limited impact on competition and trade within the EU. In particular, the aid is proportionate and any negative effect on competition and trade in the EU will be limited in view of the design of the measure, which applies to all interested companies. Moreover, Italy committed to setting up an annual monitoring mechanism which will ensure that the aid remains necessary and proportionate throughout its duration, taking into account price and market developments.

On this basis, the Commission approved the Italian measure under EU State aid rules.

READ: Valenciaport launches hydrogen pathway in European ports

“This €570 million Italian scheme will incentivise ship operators to use shore-side electricity rather than electricity produced on-board from fossil fuels,” said Margrethe Vestager, Executive Vice-President in charge of competition policy.

“With this measure, Italy will contribute to the ambitious EU target of reducing transport emissions by at least 90 per cent by 2050 while ensuring competition is not distorted.”

Earlier this year, NatPower H, a company of the NatPower group, announced a €100 million ($108 million) green hydrogen refuelling infrastructure for recreational boating in Italy, the first of its kind in the nation.

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