Germany to subsidise LNG ship projects

Malcolm Latarche
Malcolm Latarche

01 September 2017


###Following the recent conversion to LNG of the container carrier *Wes Amelie*, it seems that the German government is keen for more operators to follow suit. A new funding programme has been set up by Germany’s Federal Ministry for Transport and Digital Infrastructure (BMVI) to promote the upgrading and conversion of ships to run on LNG. The funds are made available from the mobility and fuel strategy (MKS). > According to The Association of German Shipowners (VDR), “The funding program will help German shipowners pay the considerable additional costs for gas-fuelled ships and is a real benefit for the environment”. According to the announcement by BMVI “The promotion is intended to provide targeted incentives for the diversification of the fuel base and the use of natural gas as a ship’s fuel, especially in the area of ​​German ports and European waters, in order to achieve considerable advantages for climate, environmental and health protection.” A first call for project proposals is being prepared. Companies that own a vessel or are planning a new vessel, as well as public bodies and institutions governed by public law, are eligible to apply. Applications need to be submitted before the conclusion of a delivery or service contract. Preliminary work already done must be demonstrated but is not eligible for funding. Obviously it will be some time before the success or otherwise of the programme can be known, but it is at least a movement by authorities towards recognising that the cost of meeting the environmental demands of regulators and lobbyists may be beyond the resources of the industry as things stand. As things stand, it would appear that the funds are only available to German projects so other nations also need to step up to the mark otherwise the industry will not have the level playing field it so often demands. The question might also be asked that since Germany is an EU member state, do the funds for any projects meet the subsidy and competition requirements of the EU. The problem will come if at some future point, ships which been converted with the help of such subsidies gain an unfair commercial competitive advantage over vessels which for whatever reason did not qualify for financial assistance. This could easily happen if converted ships are offered discounted port rates or if non-converted ships are prohibited from entering some ports.