Review of the Framework on State Aid to Shipbuilding

Transcription

1 European Commission Directorate-General for Competition State aid Registry 1049 Brussels 6 December 2010 JNB/6.J.3.1 Your reference: HT 2656 Review of the Framework on State Aid to Shipbuilding By the end of 2011 the Framework on State Aid to Shipbuilding (2003/C 317/06, 2006/C 260/03 and 2008/C173/3) expires. Therefore, the European Commission has requested responses from the Member States, the industry and other interest groups by 6 December The response is to address whether the framework is to cease or continue in its present or in a changed form. The views of Danish Maritime representing Danish shipyards and maritime suppliers are summarized here. Fundamentally, Danish Maritime finds that maritime industry should abide by the same rules which apply to all other industry. Special rules are needed, though, in particular fields as a result of the particular nature of the maritime industry. The maritime industry, not least the shipbuilding industry, has in recent years been subjected to unfair competition from third countries including some where state aid is a key factor. The European Commission has not, despite several repeated attempts, succeeded in hindering the aid provided in such countries. In the past years, the market has seen a boom in capacity expansion particularly in China and South Korea, respectively, which at present are the largest and second largest shipbuilding nations measured in built tonnage. Both countries rank shipbuilding as strategic industry. Danish Maritime info@danishmaritime.org Amaliegade 33 B, 4. DK 1256 Copenhagen K Tel Fax , Rue de Cornet B 1040 Brussels Tel Fax

2 The European shipbuilding industry has been reduced considerably. Today, Europe holds approx % of the world market as compared to a previous approx. 20 %. If one wishes to sustain European shipbuilding, at least in a limited capacity, it is imperative that the industry has the opportunity to optimize and develop its products and production methods. This requires sensible research, development and innovation possibilities. The industry needs a working environment which can contribute to safeguarding the continued existence of a complete European shipbuilding industry so that the chain from maritime equipment makers through shipyards to shipowners is unbroken. Unfortunately, the exact size is not known but the maritime sector in Europe is big. In Denmark, the maritime sector has a considerable size with approx. 100, ,000 people employed. It is considered essential not just for the trade itself but for Denmark as a whole to ensure that the critical mass within shipbuilding (yards, equipment makers, other maritime suppliers and the educational system) both in Denmark as well as in the rest of Europe is sustained. The framework consists of a series of individual support types. In the following, we list the views of Danish Maritime. Additional details appear in the enclosure (answers to questions are in bold print). In general Danish Maritime generally finds that focus has to be placed on research, development and innovation. It is in accordance with the strategy of the Lisbon Treaty and is seen by Danish Maritime as imperative to the healthy, continuative development of the European Union. But, in accordance with the communication from the Commission on the industrial policy of the EU, focus should also be placed on reducing the likeliness of misuse of the aid schemes, e.g. in cases of competition between European businesses. Innovation aid - article A demand for a minimum content of European components in ships built supported by innovation aid might be applicable. This would go to ensure that the innovation aid, to the highest possible extent, strengthens the European maritime industry and its competence.

3 The rules concerning innovation aid are directed at the shipyards. However, much and vital innovation is in reality undertaken by the shipyard suppliers or in cooperation between shipyard and supplier. Giving maritime suppliers access to the innovation aid might be a viable course, e.g. shipyard and supplier could apply for innovation aid together. Furthermore, rewarding green profiled initiatives, like innovation leading to lower CO 2 emissions etc., might be considered. It is imperative, though, to recognize that not all innovation is green innovation. Danish Maritime finds it necessary to have a clear definition of what innovation is. In order to safeguard the innovation content in the aided projects, it is perhaps advisable to establish a board of impartial, competent professionals from the Member States charged with approving the individual projects. We envision a board, on EU level, primarily meeting by virtual means which can work fast and surpass bureaucracy. Reimbursement in case of profit is another factor which might be considered. Such a demand may help to ensure that the innovation aid does not evolve into operational aid. With the use of proper control measures to ensure that competition stays balanced even while innovation aid is in use, it is perhaps thinkable to increase the limits for rightful aid in order to promote innovation and product development. Research and Development, article Research and development are vital competition parameters. Danish Maritime supports the wide support to large research programs like the 7th Framework program for research and development. This type real research should be granted considerable means, to ensure an innovative Europe with horizontal projects developed in cooperation between several interested parties such as universities, the industry and others. The purpose should be to develop a sound and competitive industry and ensure a high level of knowhow within Europe. It is noted that at present there is no dedicated sectorial aid for R&D in the shipbuilding industry. We do not propose any change to that.

4 Closure Aid, article The closure aid is more restrictive than the ordinary rules governing bankrupt businesses. This article should continue to be in place as it hinders shipyards which have gone out of business supported by closure aid to reopen within the next 10 years. As far as we know, historically this article has not been used to any large extend. We still find it useful though as it is a measure ensuring that the businesses which have gone bankrupt and as a consequence have received aid for closing down remain closed after their rescheduling of debts have been finished. This also relate to partial closures. Export Credits, article The OECD agreement on export credits from 1998 provides the rules for how the governments in individual countries may support the financing of ship newbuilding. These rules apply in all major shipbuilding nations. The EU framework allows EU countries to apply OECD financing rules in relation to delivery to both EU shipowners and to third country shipowners. Should the framework cease, it must by necessity mean that it is made possible by other rules for European shipyards to deliver ships to European flags with OECD financing. Alternately, European shipyards will no longer have access to the same terms of financing as third country shipyards who will continue to be able to provide this kind of financing to European shipowners. Development Aid, article Development Aid for European shipbuilding is provided in accordance with the OECD regulation for development aid from The rules for development aid used to be very general but have been reinforced to safeguard against misuse. The reinforcement has meant that development projects are offered in limited adjudication solely among potential suppliers in the donor country. Danish Maritime suggests an additional change by proposing that development projects involving ships must be offered in licitation throughout the EU, in the same manner as public procurements.

5 Regional development aid, article The rules for regional development aid for the shipbuilding industry in Europe are stricter than the general European rules. Danish Maritime suggests this to be held up to limit distortion of competition between the shipyards. As a whole Danish Maritime would like to see the means for providing regional development aid changed in such a way that it solely can be granted to the development of the infrastructure in the development areas. Aid to businesses should not be allowed. Many businesses lie in areas covered by the rules for regional development aid and may therefore receive regional aid. Such aid can distort the competition in relation to competitors positioned in areas where regional aid is not applicable. If required the European Commission is welcome to contact the undersigned with questions or if additional commenting is needed. Send to jnb@danishmaritime.org or call Yours sincerely DANISH MARITIME Jenny N. Braat Deputy Director