The European Union’s (EU) proposed European Green Deal took another step forward in the last week as the Council of Ministers agreed to support a €1.5 billion public sector loan facility to support regions most affected by the shift away from fossil fuels.
In January, Ursula von der Leyen proposed plans for a €1 trillion energy transition fund. Part of that is a €100 billion Just Transition Mechanism (JTM) aimed at supporting states with a high dependence on fossil fuels manage the socio-economic costs of the energy transition.
The new money will have a circuitous route to the pockets of its beneficiaries. The Council of Ministers will ask Germany, current holder of the rotating presidency of the European Council, to negotiate the €1.5 billion loan facility in negotiation with the European Parliament.
The fund will be managed by the European Investment Bank which will was already authorised to offer up to €30 billion in loans under the Just Transition Fund.
The Council of Minsters has put limits on who can access the fund. Nuclear power and fossil fuel projects are specifically prevented from applying for the credit.
It would therefore appear that maritime investments in non-hydrocarbon fuels and propulsion systems are able to apply for funding from this new facility, if they are located in regions which can demonstrate a socio-economic impact of shutting down fossil fuel activity.
Despite this apparent largesse, critics remain sceptical of the ease of access to such funding for maritime projects. At the recent fifth International Conference on Maritime Hydrogen and Marine Energy held in Norway, delegates complained that European funding remains dependent on policy decisions at different national, regional, and EU-wide levels.
Moreover, the EU remains inexact on exactly what future ship designs will be permitted. Lionel Boillot, project manager at Europe’s Fuel Cells and Hydrogen Joint Undertaking (FCH2 JU), told the conference that there are no Europe-wide regulations governing hydrogen-powered ships and that financial institutions, shipbuilders and ship owners need a comprehensive and predictable legal framework to invest in building such craft.
Under the EU’s emission trading system, an Innovation Fund has been set up to give funding of up to €10 billion for the period 2020 to 2030 for projects related to energy intensive industries including shipping and ports.
The fund’s own website proclaims that, ‘The Innovation Fund will focus on highly innovative technologies and big flagship projects with European value added that can bring on significant emission reductions. It is about sharing the risk with project promoters to help with the demonstration of first-of-a-kind highly innovative projects.’
The first call for proposals for large-scale projects is open until 29 October 2020. Projects can apply via the EU Funding and Tenders portal.