Norwegian Ministry of Trade and Industry launched schemes for renewal of the coastal fleet

On August 20th the Norwegian Minister of Trade, Iselin Nybø, launched the government`s new schemes for renewing the coastal fleet at the Corvus Energy factory in Bergen. She visited Corvus Energy together with Kystrederiene which is Norway’s leading employer and interest organization for vessels in short-sea and aqua shipping. The launch was livestreamed on the Norwegian national news channel, TV2.

A description of the new schemes can be found in the editorial below which is written by Kystrederiene and translated into English by Corvus Energy.

Click here to access the original editorial in Norwegian on the Kystrederiene website.

New schemes for renewal of the coastal fleet

The government launches a new condemnation scheme and a new loan scheme for short sea shipping. – This is very good, says Tor Arne Borge, CEO of Kystrederiene

Minister of Trade and Industry Iselin Nybø, together with Mary Ann Mostraum, board member and head of bulk in the Coastal Shipping Companies and CEO Tor Arne Borge, launched the new condemnation and loan scheme proposed in the revised national budget.

Earlier this year, the government proposed to establish a condemnation scheme for ships in short sea shipping, and as a phase 3 measure at the end of May, to establish a separate loan scheme as top-level financing. The Parliament then allocated NOK 75 million to the condemnation scheme, and a loss provision of NOK 300 million and a loan limit of NOK 600 million to the loan scheme.

“With these schemes, the government shows that they have listened to Kystrederiene and established a facility that will meet many shipping companies along the coast. We now hope that many shipping companies with older ships will use this opportunity so that we can take advantage of the financial framework that has been allocated this time and replace as many old vessels as possible. We have confidence that the government will provide additional funding when they see that the schemes are utilized and that the measures yield results “, says Tor Arne Borge.

Borge adds that Kystrederiene, which organizes the largest share of vessels in short sea shipping, has worked with fleet renewal together with members for some time. The organization’s members are currently working on new construction projects that represent approximately NOK 9 billion. In addition, approximately another 35 projects can be realized.

Roslagen Shipping is one of the well-established family shipping companies operating in short sea shipping. Shipowner Mary Ann Mostraum is aware that the company’s future depends on fleet renewal.

“We are very positive about the new schemes. From what we have seen so far, they do fit what we need and we will immediately start to see what we can do. A fleet renewal will ensure further development of the maritime industry and secure jobs along the coast “, she says.

The schemes are administered through Innovation Norway

Briefly about the Condemnation Scheme:

  • Shipowners must condemn an ​​older vessel, and buy a new low- or zero-emission vessel or rebuild a newer vessel to give lower emissions
  • The target group is Norwegian-registered companies that have cargo ships in the short sea fleet that run between Norwegian ports and Norwegian and European ports
  • There is no requirement as to which flag the new or condemnation vessel will or was registered under.
  • Shipowners must own both the vessel that is condemned and the new vessel
  • The grant recipient is obliged to ensure the dismantling of the vessel that is condemned in accordance with the principles of sustainable destruction.
  • The subsidy amount of up to NOK 8 million will provide an incentive for the shipping companies to dismantle the ship, instead of selling it, so that old ships are actually removed, and do not return to Norwegian waters and compete in the already tight market that is in short sea shipping.

Briefly about the loan scheme:

  • The loan scheme for vessels in short sea shipping and fishing vessels provides loans for the purchase of zero- and low-emission vessels or for investments in used vessels that are rebuilt to provide lower emissions
  • Will have the same structure as Innovation Norway’s innovation loan scheme
  • Interest 3.95% (from 1 June for current loans), term 15 years
  • The maximum loan amount is NOK 50 million
  • Requirements are set for the use of the NOR / NIS flag

The value each individual parameter brings to a project will be assessed on a case-by-case basis when doing an overall assessment of each project. The new loan scheme for ships in short sea shipping and the fishing fleet is based on the existing Innovation Loan scheme but will be reserved for ships in short sea shipping and the fishing fleet