France and South Korea top maritime state aid handouts during Covid-19

Date: Monday, October 26, 2020
Source: Splash 247

Governments have been dishing out billions of dollars in shipping aid packages during the Covid-19 pandemic with very few strings attached, a situation that ought to change according to a new report from the Paris-based International Transport Forum (ITF), which operates under the auspices of the Organisation for Economic Co-operation and Development (OECD).

ITF researchers have compiled a list of the maritime state aid handed out around the world this year (see below), the vast majority carry little in the way of achieving wider policy objectives.

“Maritime sector support should be targeted more strategically to help achieve broader objectives than mitigating losses for recipients,” the seven-page report states.

“Aid schemes usually include safeguards to avoid that firms will be overcompensated. Beyond that, however, governments rarely impose conditions designed to achieve public policy objectives other than the immediate goal of mitigating economic losses for the shipping sector due to Covid-19,” the report maintains.

A notable exception is Finland. The Finnish government imposes three conditions on aid recipients: first, they must carry products “deemed essential for the security of supply”. Second, they must represent a sufficiently large transport capacity, defined as the ability to move at least 5,000 tonnes per week. Third, they must offer regular transport services, defined as services operating several times per week for perishable goods and at least once a month for more durable goods.

Another exception is Germany that has reserved part of its maritime support package for cleaner ships and maritime innovation.

Like aviation, the large majority of support measures for shipping detailed in the ITF report include no conditions on economic, social or environmental objectives with most countries not even reporting on the impacts of their maritime state aid scheme.

In the list compiled by the ITF, France is by some distance the largest donor of maritime state aid this year followed by South Korea.

 

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