European Commission Adopts New Framework for Shipbuilding

The European Commission has adopted revised rules for assessing state aid for shipbuilding to take account of the more specialised nature of today’s shipbuilding industry. The new framework, in particular, prolongs and streamlines the rules on aid for innovation in shipbuilding, which are unique in EU state aid law, and extends the scope of these rules to new specialised market segments.

The new framework will enter into force on 1 January 2012.

Commission Vice-President in charge of competition policy Joaquín Almunia said: “Encouraging innovation in shipbuilding is vital for the competitiveness of this industry. The new rules will help to maintain a specialised, competitive and innovative shipbuilding industry in Europe.”

The new Framework extends the scope of the current rules to inland waterway vessels, as well as floating and moving offshore structures and further provides refined rules on innovation aid. In particular, it clarifies the process for establishing the innovative character of projects to be subsidised, in line with the Commission’s practice.

Rules on export credits and regional aid remain unchanged. Finally, the Framework no longer contains specific provisions related to closure aid, employment aid and development aid, because they had either not been used under the old framework or were not specific to shipbuilding.

In addition, aid to shipbuilding may continue to be granted under all horizontal state aid instruments, unless otherwise provided for in those instruments.

The Framework will apply for 2 years, from 1 January 2012 to 31 December 2013. After that period, the Commission envisages that the provisions on innovation aid will be integrated in the future version of the EU Framework for State aid for research and development and innovation and the provisions on regional aid in the revised Regional Aid Guidelines. Both sets of horizontal rules will need to be reviewed by then.

The State Aid Action Plan ( IP/05/680 and MEMO/05/195) states that the Commission should evaluate whether there is a continued need for specific rules for the shipbuilding sector or whether the sector should be governed by the general state aid rules. Against this background and drawing on the experience gathered during seven years of applying the special shipbuilding rules, the revision of the Framework and the accompanying detailed impact assessment focused on determining which special provisions are still needed. The current Framework came into force in 2004 and is due to expire on 31 December 2011.

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World Maritime News Staff, December 7, 2011; Image: EU