Commission Initiates Investigation of Proposed Italian State Aid

The Commission has decided to initiate the formal investigation procedure(1) of a draft Italian aid scheme granting an incentive to shipowners for the elimination of single hull tankers over 20 years of age. The Commission welcomes the objective of the proposed aid, which aims at implementing Community maritime safety legislation and achieving higher safety standards in maritime shipping. However, further clarification of the notified scheme's guarantees in terms of protection of the environment and re-investment conditions is needed.

Italy has notified a draft aid scheme granting an incentive to ship owners for the elimination of single hull tankers over 20 years of age. Under the proposed scheme, shipowners who demolish old tankers equipped to transport crude oil or oil and chemical products would benefit from a maximum aid of just under 4 million € (7 500 million ITL). The proposed aid measure may benefit from a derogation under the Treaty and may be authorized if the positive impact on the environment does not unduly distort competition. Clarifications are however sought concerning the scheme's compatibility with Community guidelines or with established practices on environmental protection and safety. While recognizing the objectives of the proposed scheme, which indeed goes further than Community legislation requires, by encompassing a broader category of ships(2), the Commission is concerned that in its present form the lack of clear restrictions on reinvestments, for example on certain categories of single hull tankers, might lead to negative environmental side-effects or unduly distort competition.