New government funding for LNG in force

The Federal Ministry of Transport and Digital Infrastructure published the highly anticipated funding directive regarding the usage of liquefied natural gas (LNG) of sea-going ships. Soon a first call for funding applications will follow. Shipping companies will then be able to apply for subsidies for new builds and conversions of ships with LNG propulsion.

With this new funding directive, the Federal Ministry of Transport and Digital Infrastructure (BMVI) subsidises exclusive or dual fuel operation of main engines of new builds or existing sea-going ships. The ships have to be either registered in a German shipping register for sea-going ships, fly an EU flag or operate primarily in European waters.

The shipping companies of these ships can soon apply for a proportional investment subsidy to the costs of the installation of the LNG powered engine. The subsidy is either for the costs regarding environment protection (if they can be separately determined) or the difference between the costs for LNG in comparison to a less environmentally friendly investment. According to the funding directive of the BMVI a maximum of 40% of the costs will be subsidised. For medium-sized companies (up to 250 employees and 50 million annual turnover) the subsidisation quota rises to 50% and for small companies (up to 50 employees and 10 million annual turnover) even to 60% of the fundable costs.

The new funding directive aims at the following goals:

1. The funding of LNG as a marine fuel contributes to the reduction of air pollutant emissions.
2. The funding supports the compliance with the limit values set by the environment protection convention MARPOL.
3. The funding regulation is supposed to increase the demand for LNG as marine fuel in Germany, which will likewise create incentives for the gas sector to develop a LNG supply infrastructure in ports.
4. This funding is part of the “Mobilitäts- und Kraftstoffstrategie (MKS)” (mobility and fuel strategy) of the federal government which is supposed to promote the development of alternative propulsion systems and fuels.

The usage of LNG as marine fuel contributes to the reduction of greenhouse gas and air pollutant emissions since it does not contribute to sulphur oxide emissions (SO_x). Using LNG rather than common marine fuel reduces the sulphur oxide emissions of a sea-going vessel by up to 90 percent, the particle emissions even up to 98 percent.

Further information is available in the funding directive or on the website of the Federal Ministry of Transport and Digital Infrastructure.