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New funding guideline for coastal shipping

By 16. March 2021April 7th, 2021No Comments

New funding guideline for coastal shipping

March 2021

In a nutshell:  The Federal Government grants aid of up to 60% of the additional costs incurred through engine moder­ni­sation or pollution reduction measures to ship owners in coastal shipping. Any company based in the Federal Republic of Germany that is the owner of a merchant ship regis­tered in the German ship register and flying an eligible flag is eligible for funding.

The Funding Guideline for the Sustainable Moder­ni­sation of Coastal Ships of 18 November 2020 (Federal Gazette AT 14.12.2020 B7) creates an incentive to reduce air pollutants and green­house gases and improve the energy efficiency of ocean-going ships. The following measures are eligible for funding:

  • Moder­ni­sation of engines (for example, by acquiring a lower-emission ship engine or an electronic drive system; and this applies to both existing ships and newbuildings);
  • Impro­vement of energy efficiency;
  • Reduction of pollutants emitted from existing ships.

Propulsion systems that run on natural gas (LNG and CNG) are not eligible. The promotion of these systems is covered by a separate promotion programme, about which we will keep you informed.

The funding rate for engine moder­ni­sation and emission reduction is set at 40% of eligible expen­diture and that for energy efficiency impro­vement at 30%. Parameters such as the size of the company and the area eligible for funding can also allow for surch­arges that lead to an increase in the grant to up to 60% of the costs of the measures.

Any company based in Germany that owns a merchant ship regis­tered in the German ship register and flies an eligible flag is eligible to apply.

A merchant ship for the purposes of the directive is a ocean-going vessel that is used commer­cially as a cargo or passenger ship or is hired out commer­cially for this purpose. In addition, it must be able to pass through the Kiel Canal. The maximum dimen­sions foreseen for this are 235m length, 32.5m width, 40m height and 9.5m draught.

Eligible merchant ships are those flying the federal flag (also on the basis of a flag certi­ficate pursuant to § 11 para. 1 Flaggen­rechts­gesetz), the flag of an EU state, Iceland, Liech­ten­stein, Norway or Switzerland.

The funding programme provides for funding appli­ca­tions to be submitted after a first call until 12 May 2021. The appli­ca­tions, which must be submitted exclu­sively electro­ni­cally, undergo a two-stage review process: After a formal review of the appli­cation with regard to funding law, business management and technical aspects, the eligi­bility for funding is examined. In this second step, the appli­ca­tions are put into compe­tition with each other and assessed and priori­tised according to two criteria:

  • Contri­bution of the project to the objec­tives of the NaMKü Directive (60% weighting)
  • Share of value added within the EU (40% weighting)

Only projects whose imple­men­tation has not begun before the grant is awarded will be funded. After receiving the grant, the recipient is obliged to use the equipment commer­cially for a period of five years from the date of instal­lation or replacement.

The guideline is limited until 30 June 2024. If necessary, the term may be extended until 31 December 2025. The deadline for receipt of appli­ca­tions after the first call is 12 May 2021. There are to be further funding rounds. However, it is currently not known when this will be.

If you have any further questions, please do not hesitate to contact your contact person at EHLERMANN RINDFLEISCH GADOW or Dr. Stefan Rindfleisch or Hanno Geissler.

Your contact persons:

Dr. Stefan Rindfleisch
Dr. Stefan Rindfleisch
rindfleisch@​erg-​legal.​com

Hanno Geißler
Hanno Geissler, LL.M.
geissler@​erg-​legal.​com