EU Commission approves €570 million Italian State aid shore power scheme

The European Commission has approved, under EU State aid rules, a €570 million Italian scheme to incentivise ships to use shore-side electricity when they are at berth in maritime ports.

Under the scheme, which will run until 31 December 2033, the aid takes the form of a reduction of up to 100% of the so-called ‘general system charges’. Those charges are included in the electricity price and aimed at financing certain public policy objectives, including renewable energy.

In a statement issued on Monday (17 June), the European Commission said the reduction will result in a lower electricity price for ship operators when purchasing shore-side electricity and will bring the cost of electricity at a competitive level with the cost of producing electricity on-board through fossil-fuelled engines.

By lowering the cost of shore-side electricity for ships, the measure is expected to incentivise ship operators to opt to use cold ironing.

Initially, the reduction will cover 100% of the general system charges. Italy committed to set up an annual monitoring mechanism to verify the difference between the actual costs of purchasing shore-side electricity and the actual costs of self-generating electricity using fossil fuels onboard and will adjust the level of the aid accordingly.

‘This €570 million Italian scheme will incentivise ship operators to use shore-side electricity rather than electricity produced on-board from fossil fuels,’ said Margrethe Vestager, Executive Vice-President in charge of competition policy. ‘With this measure, Italy will contribute to the ambitious EU target of reducing transport emissions by at least 90% by 2050 while ensuring competition is not distorted.’

As previously reported, last year, the European Parliament and the Council adopted the FuelEU Maritime Regulation setting up a common EU regulatory framework to increase the share of renewable and low-carbon fuels in the fuel mix of international maritime transport, as well as the Alternative Fuel Infrastructure Regulation, aimed at ensuring the availability of a network of alternative fuels infrastructure across the Union, including onshore power supply infrastructure at EU ports. By 2030, containerships and passenger ships will be required to use onshore power supply at major EU ports.

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