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NORWAY TO FUND LOW-EMISSION SHORT-SEA FLEET

Friday, August 21, 2020 

The Norwegian Minister of Trade, Iselin NybÝ, together with Norwegian short-sea shipping organisation Kystrederiene, has launched the government`s scheme for renewing the country's coastal fleet at the Corvus Energy factory in Bergen.

The proposals to establish a scrappage scheme for ships in short sea shipping and establish a separate loan scheme as top-level financing had first been announced earlier in 2020. Parliament has allocated NOK 75m to the scrappage scheme, and a loss provision of NOK 300m and a loan limit of NOK 600m to the loan scheme.

Tor Arne Borge, CEO Kystrederiene, said: “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 utilised and that the measures yield results.“

According to Borge, Kystrederiene members have been working on fleet renewal for some time, with new construction projects representing about NOK 9bn. About 35 more projects can be realised. The schemes are administered through Innovation Norway

Under the scrappage scheme, shipowners condemn an ​​older vessel, and buy a new low- or zero-emission vessel or rebuild a newer vessel to give lower emissions. It applies to Norwegian-registered companies that own cargo ships running between Norwegian ports, or Norwegian and European ports. The old ship must be sustainably dismantled, with a subsidy encouraging dismantling rather than resale.

Loans are available for new zero- and low-emissions vessels in short sea or fishing, or for rebuilding existing vessels to provide lower emissions. Qualifying vessels must sail under the NOR / NIS flag. The loans scheme is based on the existing Innovation Loan scheme but reserved for ships in short sea and fishing.

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