German Directive on aid for the upgrading and conversion of ships using LNG as marine fuel

The German Ministry of Transport and Digital Infrastructure (BMVI) has published an announcement inviting all German companies interested or engaged in using LNG as fuel in the shipping sector to submit their applications for grants, by 28 February 2018.

The statement  concerns all projects clearly demonstrating the purpose of improving or upgrading the main propulsion of ships, based either on exclusive LNG fuel or "dual fuel", including all equipment and auxiliary systems necessary for the operations (eg tanks, supply systems (bunkers), cryogenic and membrane systems, pipelines and installations, electronics, control engineering, safety and auxiliary systems, etc.

The authority will decide at its discretion on support, within the limits of the available budgetary resources. In the case of funding, a maximum of 40% of the eligible expenditure is foreseen, which can be increased by 20% in the case of small and medium-sized enterprises. A maximum amount of EUR 15 million per company and/or investment project will be allowed for grants.

Beneficiaries may be companies (natural or legal persons) of private law, owners of a ship to be converted or who are building a new ship, provided that is recorded in a German maritime register, flying the flag of a Member State of the European Union and to be used commercially or publicly for maritime navigation in European inland waters (understood as exclusive economic zones - EEZ, pursuant to Article 55 et seq. of the United Nations Convention on the Law of the Sea).

The eligibility of the projects will be based on an evaluation matrix based on different criteria, including the project objectives and the full funding, the necessity and the adequacy of the amounts required to achieve the project objectives, the environmental impacts expected as a result project implementation, qualifications and competences of project applicants and partners, creation of value and job creation within the EU, transferability to follow-up projects (multiplier effects), level of technical innovation.

Projects must be launched within six months from the date of approval of the grants and in principle their duration should not exceed 2 years.

Since the beginning of 2017, Germany has announced its intention to promote the use of liquefied natural gas (LNG) as fuel in maritime transport, through a financing program aimed at using LNG in German shipping.

Among the recent examples of the federal strategy for the promotion of LNG can be mentioned the conversion to LNG of the first container ship "Wes Amelie",  the construction of a new LNG passenger ferry operating on Lake Constance and the launch of the new LNG ship project for hydrographic research "Atair II" of the Federal Maritime and Hydrographic Agency (BSH), currently under construction at the Fassmer shipyard in Berne, Germany, on the bank of the Weser river, which is expected to enter service in 2020.