- The Norwegian government seeks to strengthen the competitiveness of sea transport to help meet the goal of transferring freight from road to sea in Norway. In 2017 we have budgeted NOK 82 million for a grant for ship owners in the European Economic Area (EEA) to support projects that lead to modal shift from road to sea and has a social benefit, says Minister of Transport Ketil Solvik-Olsen in a statement.
- The strength of sea transport is to carry large quantities of cargo over long distances in a more climate and environmentally friendly way, compared to other modes of transport. Transport safety can be improved by benefitting from the safety features of sea freight. Therefore, the Norwegian parliament has launched a grant that will contribute to the establishment of new freight services by sea, says Sven Martin Tønnessen, Director of the coastal management department of the Norwegian Coastal Administration (NCA).
- The establishment of new maritime transport services can often be prevented by high start-up costs and low freight volumes initially. NCA will give support to ship owners established in the EEA, with ships that are flagged in an EEA country, for up to three years provided that the new short sea shipping service generates social benefits, is dependent on state support and becomes viable after the support period, explains Tønnessen.
How the aid scheme is set up
The aid will be directed to shipowners who can, based on a detailed business plan concerning a new route or the upgrading of services on an existing one, document that the aid will lead to a modal shift from road to sea, without diverting maritime transport in a way which is contrary to the common interest. The shipowner may cooperate with other partners to create a solid business plan, but the aid will be granted to the shipowner directly
The new short sea shipping service shall exist between a Norwegian ports or a Norwegian port and a port within the EEA. The grant may only be awarded to one project per route with no renewal, extension or repetition of the project in question, unless the new route is complementary to an existing. Grants will be awarded to existing services only in exceptional circumstances. Such applicants must provide the Norwegian authorities with clear evidence that the service in question would cease operation in the absence of financial support by the state.
The aid scheme has been approved the ESA (EFTA Surveillance Authority) to last from 2017 to 2020. 2020 is the last year applicants may receive confirmation of support. Projects may receive aid from the scheme for a maximum of three years.
All applicants are required to estimate the award's environmental benefit
The society benefits from transfer of freight from road to sea, because the social costs in terms of accidents, noise, traffic jams, air pollution, greenhouse gas emissions and wear and tear on infrastructure are lower for sea transport compared to road transport. The NCA has developed a unique calculation tool for the environmental benefit. In cases where projects competed for the grant, the NCA will rank these according to environmental benefit generated per granted NOK.
The grant must not distort competition in a way that is incompatible with the EEA Agreement. The potential impact that the aid may have on distorting completion shall be outweighed by the wider benefits that the scheme will provide.
- There must be environmental benefits from the transportation of goods by sea rather than road
- The project would not be commercially viable without a grant
- The current route must be viable / profitable after the support period
Only operating costs directly attributable to the freight being transferred from road to water, or costs directly attributable to the purchase of trans-shipment equipment to supply the planned service, will be eligible for aid under the scheme.
The upper limit for grants is either the award's calculated environmental benefit of the modal shift, 30% of the operating costs or up to 10% of the trans-shipment equipment costs. Eligible costs can be:
- the cost of hiring, leasing or amortization of sea-going vessels;
- the cost of hiring, leasing or amortization of installations permitting trans-shipment between shipping routes, railways and roads;
- the costs of using maritime infrastructures;
- the expenditure relating to commercial operation of techniques, technologies or equipment previously tested and approved, in particular transport information technology;
- the costs of measures related to staff training and the dissemination of project results as well as expenses for information and communication activities to make new transport services known;
- the costs associated with separate accounting and feasibility studies.
In the alternative, costs to finance the purchase of trans-shipment equipment to supply the planned services are eligible for aid. This includes necessary freight handling equipment to enable effective intermodal transshipments.
The SPEC of Norway has tested the NCA calculation tool. Here are some examples of the size of the grant for a semi-truck or a 45-foot container carrying 17 tons of cargo:
- Oslo-Stavanger: NOK 2100 (€ 1 is abort NOK 9)
- Oslo-Bergen: NOK 1554
- Stavanger-Trondheim: NOK 3307
- Oslo - Tromsø (driving in Norway): NOK 5400
- Bodø-Tromsø: NOK 1808
- Hitra-Larvik-Germany: NOK 2730
This year's application deadline is May 15th. NCA aims to finish processing the applications before the summer holidays.
Contact in the NCA for modal shift grants:
- Erika Marlen Støylen
Tel: +47 70231 040, Mob: +47 41146011
- NCA web site for modal shift grant