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Subsidies to shipping, Korea’s green choice / ANALYSIS

Since the start of the 2008 crisis, Italian shipowners have sold over 100 ships, about a quarter of the national fleet. The crisis has hit hard all over the world, with knock-on failures.

Since the start of the 2008 crisis, Italian shipowners have sold over 100 ships, about a quarter of the national fleet. The crisis has hit hard all over the world, with knock-on failures. But in no other country has shipping continued to find obstacles as in Italy, where the Ministry of the Environment has come to classify tax breaks reserved for shipowning companies (Tonnage Tax) as “Environmentally Harmful Subsidies”. An absurdity, because in recent years the emissions produced have increased overall, but in the face of the doubling of the Italian flag fleet.

Yet sea transport is by far the most environmentally friendly means. An example of an opposite sign comes from South Korea, where the government has decided to intervene with subsidies in favour of private shipowners for the construction in the national shipyards of 140 bulk carriers and 60 container ships powered by LNG. The new buildings will replace ships powered by fuel oil and will therefore significantly reduce pollution. In Europe, subsidies of this kind are not permitted, even if they are intended to improve the environment. A rigid facade that hides numerous exceptions, almost always happens in favour of German companies, starting with the naval credit. Apparently, the European Commission maintains the traditional ideological rigidity in terms of state subsidies regardless of environmental objectives while, again in Korea, last year the Export Import Bank financed the restructuring of shipping companies and shipyards with loans and guarantees worth over 750 million dollars.

Near (fortunately) to the end of his mandate, the President of the European Commission Jean Claude Juncker recited his mea culpa (through my fault) admitting that during the debt crisis “there was a reckless austerity, not because we wanted to sanction those who work and who are unemployed, but because structural reforms remain essential”. Beautiful words but useless if they do not translate into concrete actions in favour of both public works and companies that invest in eco-ships and construction sites that make them. In Korea, new shipping aid is motivated primarily by the protection of the environment made possible by new technologies. A process that was born in shipyards, which must be the first to be supported. This is what we would like in Italy, but here with us, time is unfortunately not considered a factor of competitiveness. Just to give an example, when will the so-called “seaward expansion” of the Fincantieri plant in Sestri Ponente finally be realised? The project launched in 2009 proved to be insufficient compared to the needs of the market and is being redefined. In addition to the increase in operational space, Fincantieri intends to build two new docks and a large 350-metre-long basin suitable for the construction of 150,000 gross tonnage ships.

Much of the money is there and with the derogations planned for the Genoese emergency, even times should be accelerated. Public investment is strategic, the private sector is thinking big and pushing for a great future for the shipyard even after 2024, when the last vessel in the portfolio is completed. So far, the ‘seaward expansion’ project has been synonymous with bureaucratic complexity and the slowness of public administrations. Who knows, for once, in Genoa perhaps we can do things as if we were Koreans.

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