If subsidies for shipping are really wanted, they should be allocated to innovations and the introduction of new technology.
In November, it was reported that Finland will switch to shipping emissions trading, but companies have not yet taken it into account (HS 15.11). The news mentioned that the emissions trading will increase Finland’s export costs by 500–700 million euros per year.
Finland’s total exports are 120 billion euros (2022), of which about 66 billion worth of goods travel by sea. The additional cost of half a billion euros for sea transport means only a 0.7 percent cost increase in product prices. It’s all about how this average cost increase of less than one percent can be passed on to export customers.
However, emissions trading is only the beginning of the transformation of shipping. This year, both the international maritime organization IMO and the EU have set several complementary mechanisms to guide shipping towards carbon neutrality by 2050. The most significant of the control measures is the gradually tightening obligation to use carbon-neutral fuel.
These changes change maritime technology, fuels and operating models. During the last decade, shipping has already achieved a lot of savings in fuel consumption and greenhouse gas emissions, ship technology has been renewed and the newest ships have already been prepared for the use of emission-free fuels.
The state must not slow down
Finland depends on competitive shipping. The most important task of the national government is now not to slow down the development towards emission-free shipping.
Incorrectly weighted support programs for shipping, such as the island exception, the halving of the fairway dues and the decreasing of costs of emissions trading for ice-strengthened ships, slow down the green transition and distort competition between operators.
At worst, due to support programs that slow down development, Finnish shipping lags behind other countries in the competitiveness of green know-how. If subsidies are really wanted, they should be allocated to innovations and the introduction of new technology.
The cost of the green transition is high, but it should be fairly distributed in such a way that it supports the most emission-free mode of transport. When the shippers also contribute to the increase in costs, we will be able to build a significant competitive advantage for Finland from maritime technology and know-how.
This opinion piece has been published on Kauppalehti’s Debatti column on 12 December 2023 in Finnish.
Tales of Talsinki 