European Commission Approves €570 Million Italian State Aid Scheme to Reduce Emissions in Ports

The European Commission has sanctioned a €570 million Italian initiative aimed at reducing greenhouse gas emissions, air pollution, and noise in maritime ports. This measure aligns with the objectives of the European Green Deal and is structured under EU State aid regulations.

Italy’s scheme, which will be operational until December 31, 2033, incentivises ship operators to utilise shore-side electricity infrastructure while docked. This infrastructure will power onboard services, systems, and equipment, reducing reliance on fossil fuels. The aid will manifest as a reduction of up to 100% in general system charges, which are part of the electricity price and finance public policy objectives, including renewable energy.

The primary goal is to make shore-side electricity cost-competitive with the electricity generated onboard ships through fossil-fueled engines. By decreasing the cost of shore-side electricity, the measure aims to encourage ship operators to switch to this more environmentally friendly option, consequently reducing significant greenhouse gas emissions and other pollutants.

Italy has committed to an annual monitoring mechanism to compare the actual costs of shore-side electricity against self-generated electricity costs using fossil fuels. The level of aid will be adjusted accordingly based on these findings.

The Commission evaluated the scheme under Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU) and the Guidelines on State Aid for Climate, Environmental Protection, and Energy (CEEAG). The assessment concluded that:

  1. Necessity and Appropriateness: The scheme is deemed necessary and suitable to encourage shore-side electricity, thus enhancing environmental protection by reducing greenhouse gas emissions.
  2. Incentive Effect: The scheme has a clear incentive effect, as ship operators would not opt for shore-side electricity without this support.
  3. Limited Impact on Competition and Trade: The aid is proportionate and designed to have a minimal negative impact on competition and trade within the EU. The annual monitoring mechanism will ensure the aid remains necessary and proportionate, considering market and price developments.

The Commission approved the Italian measure under EU State aid rules based on these factors.

Margrethe Vestager, Executive Vice-President in charge of competition policy, stated, “This €570 million Italian scheme will incentivize ship operators to use shore-side electricity rather than electricity produced on-board from fossil fuels. With this measure, Italy will contribute to the ambitious EU target of reducing transport emissions by at least 90% by 2050 while ensuring competition is not distorted.”

Background

The Commission’s 2022 CEEAG provides a framework for assessing the compatibility of environmental protection and energy aid measures under Article 107(3)(c) TFEU. These guidelines support EU Member States in achieving Green Deal objectives cost-effectively. The European Green Deal sets a target of net-zero greenhouse gas emissions by 2050, with an intermediate goal of a 55% reduction by 2030, as mandated by the European Climate Law.

Additionally, the FuelEU Maritime Regulation and the Alternative Fuel Infrastructure Regulation, adopted in September 2023, aim to increase the share of renewable and low-carbon fuels in maritime transport and ensure the availability of alternative fuels infrastructure across the EU.

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