In January, the Council of Ministers approved the latest draft of the "National Recovery and Resilience Plan" ("NRRP"). A draft that, especially in the light of the latest news on the political front, may be subject to extensive amendments (there is even talk of a complete rewrite), but which nevertheless offers the opportunity to make a reflection.
As is well known, the NRRP is the document in which the Italian Government has collected/shall collect the projects that it intends to finance using the resources allocated to Italy through the "Recovery Fund".
It is not our intention here to enter into the merits of the draft NRRP, nor to express an opinion on the projects contained therein, but we wish to draw attention to the lack of support – within the funds earmarked for energy transition – for the renewal of the Italian ferry fleet (a renewal for which significant resources had previously been envisaged).
As far as we understand it, the cancellation of these resources was also a consequence of the "policymakers'" fear that any direct funding for the renewal of the fleet could be censured at EU level for an alleged conflict with the applicable State aid rules.
In this respect, however, we would like to point out that the issue of aid for fleet renewal had already been addressed at EU level back in 2004. We refer, in particular, to Communication C(2004) 43 of the European Commission - "Community guidelines on State aid to maritime transport" – and namely to Article 5 of the Communication.
Said article provides, in substance, for the following
- subsidies for fleet renewal are not common in other transport modes (e.g., road haulage and aviation) because they tend to distort competition. So, the European Commission has granted such schemes only in cases where they form part of a structural reform leading to reductions in overall fleet capacity. In any case, investment must comply with Regulation (EC) No 1540/98 or any other Community provision that may replace it;
- state aid which, for environmental and safety reasons, provides incentives to upgrade Community-registered ships to higher standards than the mandatory safety and environmental standards laid down in international conventions may still be considered admissible;
- investment aid for maritime companies operating in disadvantaged regions may only be permitted where it is clear that the benefits of such aid schemes will accrue to these regions over a reasonable time period.
Moreover, the European Commission has recently resumed this issue with its Communication C (2020) 789 to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions ("Sustainable and Smart Mobility Strategy - putting European transport on track for the future") (hereafter referred to as "Communication C (2020) 789") of 9 December 2020, setting out a plan to enable the European Union to become a carbon-neutral economy by 2050. To achieve this systemic change, the European Commission considers it necessary to: a) make all transport modes more sustainable; b) make sustainable alternatives widely available in a multimodal transport system; c) put in place the right incentives to drive the transition.
In the context of the measures for inclusive connectivity provided for in point 74 et seq. of Communication C (2020) 789, the European Commission has considered that State aid rules should take into account the importance of the transition of the transport sector towards environmental sustainability.
As far as our industry is concerned, the European Commission has expressly stipulated the following in point 81 of Communication C(2020) 789:
- investment must finance the modernisation of fleets in all modes to ensure faster deployment of low and zero-emission technology options, as well as the safeguarding of technology leadership of the EU's manufacturing base (including through appropriate renewal schemes);
- the need to increase the use of joint and cross-border public procurement within the European Union, in order to enable the implementation of projects in accordance with the principle of the Most Economically Advantageous Tender and thus contribute to achieving the objectives stated by the European Commission in a more cost-effective way;
- the importance of providing support for fleet renewal, albeit provided in line with the European Union's international obligations on subsidies and state aid rules, in order to preserve a thriving manufacturing ecosystem in areas where Europe has a strategic technological advantage (such as for example, the vessel manufacturing industry).
In light of all the above, one may reasonably affirm – in our opinion – that any funds intended for the renewal of the Italian ferry fleet cannot be ex-ante considered in conflict with the applicable rules on State aid.
So much so that, in point 78 of the aforementioned Communication, the European Commission also highlighted the importance of making funding more accessible to SMEs wishing to invest in the modernisation of fleets and in the implementation of further innovative and ecological solutions for the benefit of environmental sustainability. In that context, this could be achieved, inter alia, through specific administrative support and simplified financial support schemes.
Given the – perhaps unique – opportunity offered by the Recovery Plan, we hope that our Government will be able to make the best choices with regard to projects worthy of financing for the actual relaunch of the Country and, in this respect, that it will also make available (obviously in compliance with the applicable rules and procedures on State aid) adequate funds dedicated to the renewal of the Italian ferry fleet with a view to development also in terms of greater attention to the environment, as requested also by the European Union.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.