Steady as she goes

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					The Norwegian Maritime Strategy 2007




Steady as she goes
The Government`s strategy for environmentally friendly growth
in maritime industry
FOREWORD
                                                          Several countries in Europe and Asia are de-
                                                          veloping ambitious strategies aimed at boost-
                                                          ing their maritime industries and attracting
                                                          attention from the international maritime envi-
                                                          ronment. If we are to succeed in the interna-
                                                          tional arena, we must increase and fine-tune
                                                          our efforts.

                                                          The high level of skills and expertises that has
                                                          been developed in Norwegian maritime indus-
                                                          tries provides us with every possibility of enjoy-
Norway is a small country with 4.7 million in-            ing continued and increasing success in the
habitants tucked into the northern corner of              future. This is particularly true in the area of
Europe. We are a country that has to a high               environment. International shipping is facing
degree based our welfare on trade with other              major environmental challenges. The devel-
countries. It is a long time since we recognised          opment of maritime activities based on envi-
the fact that we cannot compete on low wages,             ronmentally friendly solutions as the key ele-
and that we have to be competitive in other               ment is our most important responsibility, and
ways. In short, the products we offer must be             not least an area of great potential for growth. I
first class, and our level of expertise rate              am convinced that Norwegian maritime indus-
amongst the best.                                         try has the expertise and potential to achieve
                                                          profitability through goal-oriented innovation,
As Minister of Trade and Industry I am con-               and in doing so will attain the position as the
vinced that the way forward must be to create             undisputed world leader in environmentally
comprehensive environments in areas in                    friendly solutions and operation.
which Norway has the necessary qualifications
and wherewithal to be the best. In the Soria              On the basis of this strategy, the Government
Moria Declaration, the social-liberal govern-             presents its plan to support the further growth
ment stated that it is both important and the             and development of the many segments of the
correct course of action to focus particularly on         Norwegian maritime industry. The strategy is
business and industrial areas where Norway                supported with a grant of NOK 252 millions,
already excels. This is an ambition that is a             earmarked for research, innovation and meas-
clear indicator of the difference between the             ures to improve expertise.
current and the previous government. We will
concentrate on areas in which we are in the               I will follow up the strategy in co-operation with
lead internationally or have the necessary                the various participants. The objective is that
skills, expertise and know how to be so. The              we will see the first results of our commitment
maritime industries are one such area.                    to the maritime industry as early as in 2009.
                                                          Enjoy your reading!
The markets open to Norwegian maritime
industry are experiencing a trend of global
growth. We are however not alone in wishing
to harvest benefits from these developing mar-
kets, there are a number of countries pursuing
their share of the current growth.
                                                                         Dag Terje Andersen
                                                                    The Minister of Trade and Industry


                               The Government's maritime strategy
                                                    -1-
Contents

The Norwegian maritime sector ..................................................................4
  Shipping companies.................................................................................................4
  Maritime service providers .....................................................................................5
  Shipyards ..................................................................................................................6
  Ship’s equipment industry ......................................................................................7
  Associated sectors ...................................................................................................7
1. Globalisation and framework conditions ..................................................9
  1.1 Globalisation.......................................................................................................9
  1.2 International framework conditions...............................................................10
  1.3 Norwegian framework.....................................................................................13
  1.4 Market access...................................................................................................16
  Measures and initiatives........................................................................................18
2. An environmentally friendly maritime industry .......................................19
  2.1 Environmental challenges...............................................................................19
  2.2 Emissions to air................................................................................................21
  2.3 Greenhouse gasses..........................................................................................23
  2.4 New technology ...............................................................................................24
  2.5 Other emissions from shipping ......................................................................25
  2.6 Emissions from shipbuilding ..........................................................................26
  2.7 Recycling of vessels .........................................................................................27
  Measures and initiatives........................................................................................27
3. Maritime Expertise ..............................................................................29
  3.1 Demand for expertise ......................................................................................29
  3.2 Recruitment ......................................................................................................30
  3.3 Maritime education..........................................................................................32
  3.4 Co-operation .....................................................................................................35
  3.5 Foreign employees ..........................................................................................36
  Measures and initiatives:.......................................................................................37
4. Maritime research and innovation .........................................................38
  4.1 Innovation and expertise .................................................................................38
  4.2 Challenges and opportunities .........................................................................41
  Measures and initiatives........................................................................................43
5. Short Sea Shipping ..............................................................................45
  5.1 Short sea shipping............................................................................................45
  5.2 The EU and short sea shipping ......................................................................46
  5.3 National transport policy .................................................................................47
  5.4 High North regions..........................................................................................48
  5.5 From road to sea ..............................................................................................50
  5.6 Fees and other public charges........................................................................51
  5.7 The Norwegian regional shipping fleet .........................................................51
  Measures and initiatives........................................................................................53



                                   The Government's maritime strategy
                                                            -2-
                               The Government’s vision:
    Norway will be a world leading maritime nation. Norwegian maritime
    industry will supply the most innovative and environmentally friendly
                            solutions for the future


Norwegian maritime industry encompasses                 for transport services will, if current technol-
shipping, shipbuilding, maritime equipment              ogy prevails, challenge the frameworks for
manufacturers and maritime service suppliers.           sustainable development.
These sectors are of prime importance to
wealth generation and employment in Norway.             The Government wishes to see the Norwegian
                                                        maritime industry leading the way in environ-
The strategy is supported by an allocation of           mental matters. This will require major Nor-
funds of NOK 252 millions earmarked for re-             wegian investments in research and innova-
search, innovation and measures to improve              tion.
expertise. The net wage arrangement is to be
continued, and ship owner taxation based on a           Maritime expertise:
European model will be introduced.                      Expertise will be a decisive factor for the con-
                                                        tinued development of the industry. We will
On the basis of the challenges facing the Nor-          contribute through the maritime strategy to a
wegian maritime sector, we discuss objectives           joint effort in co-operation with the industry to
and initiatives in five main areas:                     increase the levels of recruitment and exper-
                                                        tise in the maritime sector.
Globalisation and framework conditions
An environmentally friendly maritime industry           Maritime research and innovation:
Maritime expertise
                                                        Norway shall be the leading nation in maritime
Maritime research and innovation
                                                        research and innovation. Increased support to
Short Sea Shipping
                                                        more environmentally friendly shipping
Globalisation and framework conditions:                 through prioritising environmental maritime
The Government’s aim is to contribute to                technology and demanding environmentally
global regulation of maritime industries in or-         friendly maritime operations in cold climates.
der to prevent tax competitiveness, promote
environmentally friendly and safe solutions             Short sea shipping:
while simultaneously promoting secure terms             Norwegian Short sea shipping will be a more
of employment for employees.                            environmentally friendly and competitive al-
                                                        ternative to transport by road, thus enabling
Environmentally friendly maritime industry:             more goods to be transported by ship. The
International shipping is facing major envi-            Government will invest in environmental pro-
ronmental challenges. The increasing demand             jects in the maritime sector and the develop-
                                                        ment of the coastal fleet.

                              The Government's maritime strategy
                                                  -3-
The Norwegian maritime                                    billions, followed by ship equipment manufac-
                                                          turers, maritime service suppliers and ship-
sector                                                    yard.
Norway has one of the largest and most com-
prehensive maritime sectors in global terms.              Figure 1
This has provided the basis for our unique
expertise in maritime activities and represents           Wealth creation in the maritime sector di-
a major potential for innovation. The shipping            vided between 4 main groups (billion NOK)
companies represent the largest segment of
the Norwegian maritime industry. A large
number of maritime companies co-operate
                                                                                        15
closely with the shipping companies. The                                  38                    17
shipping companies are in many respects the
backbone of the Norwegian maritime industry.                                            11


We define maritime industry as all activities
                                                                        Maritime service providers
connected with shipping and shipbuilding.                               Ship equipment producers
                                                                        Shipyards
Ship owners, financing, insurance, classifica-                          Shipping companies
tion, maritime law and other associated ser-
vices. Shipbuilding encompasses activities
such as shipyards, equipment suppliers and
                                                          Shipping companies
ships architects. We have also seen the off-
                                                          Norwegian controlled tonnage was the fifth
shore industry and maritime industry forging
                                                          largest in the world as of January 1st 2007
closer bonds during recent years. The mari-
                                                          measured in deadweight tonnes, after Greece,
time industry has also clear links to the fishing
                                                          Japan, Germany and China. Norway previously
and tourist industries. We find maritime com-
                                                          held third place in the ranking. We have not
panies nationwide, and the maritime sector is
                                                          participated in the growth in international
therefore a vital element in securing activity in
                                                          shipping, despite the fact that we have had the
all regions of Norway. Compared to other re-
                                                          greatest growth in the offshore fleet. In the
gions in Norway, the maritime industry is most
                                                          third quarter of 2007 the Norwegian fleet grew
significant in Oslo region and along the west-
                                                          by 21 ships to a total of 1,795 ships. This is the
ern coast from Rogaland to Møre in terms of
                                                          highest number of ships ever.
total turnover.
                                                          There has been a gradual decline in the use of
We differentiate between four main types of
                                                          the Norwegian flag for the foreign going fleet.
maritime industry activities: shipping compa-
                                                          About 49 percent of this fleet is currently sail-
nies (including rig and drilling rig companies),
                                                          ing under the Norwegian flag, compared to 53
maritime service providers, ship and rig build-
                                                          percent at the start of 2006.
ing yards and ship equipment manufacturers,
see figure 1.
                                                          In 2002 the percentage of the Norwegian for-
                                                          eign going fleet sailing under the Norwegian
Shipping companies is the largest group with
                                                          flag was around 60 percent.
46 percent of wealth creation, i.e. NOK 38

                               The Government's maritime strategy
                                                    -4-
The number of vessels registered in the Nor-              A considerable part of the shipowners’ activi-
wegian International Skip Register (NIS) has              ties are carried out under the auspices of the
shown a considerable fall during the last five            company Wallenius Wilhelmsen, one of the
years. There were 622 vessels registered in               largest vehicle shipping companies in the
NIS in june 2007. This represents a reduction             world. The company is also one of the global
of 4 percent from July 2006.                              leaders of maritime services, for example ships
                                                          management.
In 2006 Norwegian shipping showed a growth
in turnover of approximately 10 percent com-              Solstad Offshore ASA has developed into one
pared to 2004. Norwegian shipping generates a             of the leading offshore shipping companies,
total turnover of NOK 117.9 billions, and em-             and operates offshore ships in the North Sea,
ploys 31 000 persons, of which 17 000 are                 Brazil, the Mexican/US gulf, West Africa and
Norwegians. The figures include 5 000 em-                 Asia.
ployees in ship owners’ offices in Norway, with
the remainder working as seamen.                          Color Line ASA has developed into one of
                                                          Europe’s leading cruise-ferry companies. The
Foreign going vessels and supply ships work-              company operates six international ferry routes
ing along the Norwegian coast generate the                between ten ports in Norway, Germany, Den-
largest contribution to the increase in turnover.         mark and Sweden. The company operates in
Offshore ships and supply ships working along             the dividing line between passenger transport
the Norwegian coast and internationally repre-            and tourism, and is an important participant in
sent the highest increase in employment.                  attracting foreign tourists to Norway.

Shipping is Norway’s largest export industry              Maritime service providers
after oil and gas, and is also the largest branch         Ship owners are dependent on services from a
of industry with regard to the export of ser-             wide range of maritime service providers. The
vices. Norwegian shipping operates in most of             most important amongst these are ship financ-
the major shipping markets, such as tank,                 ers, insurance, maritime law, classification,
bulk, chemicals, container, vehicle and LNG,              port and harbour services and shipping agen-
and features amongst the leaders in a number              cies.
of offshore markets, for example rig and sup-
ply. Norwegian ship-owners have however to                Many Norwegian maritime service providers
some degree left the traditional liner of trade           rank amongst the largest and most important
and cruise activities.                                    in the world in several areas. About 18 000 per-
                                                          sons are employed by these companies.
Some examples of the world's leading ship
owners are Solstad Offshore ASA, Color Line               One example, Det Norske Veritas (DNV)
ASA and Wilh. Wilhelmsen ASA.                             (ship classification) has approximately 16 per-
                                                          cent of the global market for ship classification.
Wilh. Wilhelmsen ASA offers transport and
logistics services spanning the entire globe,             Another example is the Grieg Group, which
from the manufacturer to the customer’s door.             operates a wide range of activities in the


                               The Government's maritime strategy
                                                    -5-
international arena. In addition to shipping                 high, and Norwegian shipyards have agree-
activities and agency services, the Grieg Group              ments for the delivery of ships for many years
is engaged in global logistics, insurance bro-               ahead. Orders received in 2006 totalled NOK
kerage, investment advice and maritime in-                   43.5 billions, or almost three times the total for
formation systems.                                           2005, see figure 2. This resulted in an order
                                                             reserve at the close of the year of NOK 56 bil-
The two largest banks in the world in the spe-               lions. The major part of the order reserve is
cialist field of arranging loans to shipping are             made up of contracts for the construction of
located in Oslo. The Oslo Stock Exchange is                  offshore vessels, for example supply ships.
one of the most important trading venues for
shares in maritime companies.                                This illustrates that Norwegian yards have
                                                             ventured successfully into the explosive up-
Shipyards                                                    swing in this market. Yards that for example
Norway has long traditions in shipbuilding,                  build fishing vessels have a low order reserve.
and there is still a high level of shipyard activity
along the coast. There are fewer shipyards,                  Figure 2
and those that remain have become highly
specialised during recent years and are highly                Orders received by Norwegian shipyards
proficient in the areas in which Norwegian                           2000-2006 (NOK billion)
ship owners excel. Norwegian shipyards oper-
ate in four main markets: offshore ships, small
specialist ships, fishing vessels and passenger                60
ferries.
                                                               40
Despite there being a large number of small,
specialised yards, there has also been a trend
                                                               20
towards consolidation into larger groups.
Europe’s largest ship building group, Aker
Yards ASA, with its head office in Oslo, is one                  0
example of this.
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Aker Yards, ASA with yards in the west of Nor-
way and at Brevik, is a world leader in the con-
struction of advanced ships.                                  In 2005 Norwegian offshore and shipyards
                                                             generated wealth creation of about NOK 11
Leading expertise and highly skilled staff in                billions. In the same year turnover for the 20
innovative work environments are the most                    largest shipyards was roughly of NOK 20 bil-
important competitive advantages of Norwe-                   lions.
gian shipyards.
                                                             In total approximately 20 000 persons are em-
Demand for new vessels in the world market is                ployed in the Norwegian shipyard industry.



                                 The Government's maritime strategy
                                                       -6-
Norwegian shipyards participate in interna-                Jotun AS, Frank Mohn AS and the Kongsberg
tional work sharing. This means that many                  Group.
yards have hulls constructed in foreign yards,
and then moved to Norway for outfitting and                During its initial phase of establishment, Jotun
completion. A large number of the hulls or-                AS sold ships paint to the many whaleboats
dered at the close of 2006 were for example                that had to be re-painted each summer.
built in Romania, for outfitting and completion            The company soon developed into a national
in Norway.                                                 and global supplier of quality protective coat-
                                                           ings. The Norwegian shipping has been a de-
This form of work sharing illustrates that Nor-            cisive factor for Jotun’s existence. Products
wegian yards, to a higher degree than previ-               supplied by Jotun currently protect more than
ously, are specialising in the more complicated            10 000 ships and other vessels.
and technically demanding areas of shipbuild-
ing that require advanced knowledge and ex-                After having been a major supplier of herring
pertise.                                                   pumps for many years, in the 1960’s Frank
                                                           Mohn AS developed a series of pumps for spe-
Norwegian yards compete with yards in many                 cialist tank ships. The company is now the
of the major shipbuilding nations. The world’s             world’s largest manufacturer of discharging
largest shipbuilding nations are South-Korea,              pumps for tankers. The bulk of production is
Japan, China and the EU countries.                         exported. In recent years the company has
                                                           concentrated on the development of sub-
                                                           mersible pumps and other equipment for the
Ship’s equipment industry
                                                           Offshore industry.
Norway is home to maritime equipment manu-
facturers in a wide variety of areas, including
                                                           The Kongsberg Group is an internationally
motors and engines, pump systems, navigation
                                                           oriented and knowledge-based group. The
equipment, surface coatings, heating systems,
                                                           company’s main activities are in the markets
ships furniture and positioning systems to
                                                           for maritime electronics and defence systems.
name a few. Norwegian maritime equipment
                                                           The main part of the group’s activities is focus-
manufacturers supply about 7 percent of ships
                                                           sed on international markets.
equipment purchased world wide, and export
in the region of 70 percent of their total produc-
tion.                                                      Associated sectors
                                                           A large part of Norwegian maritime activities
In 2005 Norwegian maritime equipment manu-                 are linked to the extraction of oil and gas. Plat-
facturers generated wealth creation of about               forms and other offshore installations are
NOK 17 billions. The Norwegian ships equip-                equipped with advanced equipment that has,
ment industry has approximately 22 000 em-                 many of the same functions required in tradi-
ployees.                                                   tional shipping activities, for example systems
                                                           for telecommunication, dynamic positioning,
Some examples of the development of the Nor-               propellers, pumps and so forth.
wegian maritime equipment industry are



                                The Government's maritime strategy
                                                     -7-
The oil and gas companies use to a high de-              The development and production of equip-
gree the same suppliers as the maritime indus-           ment to the fish farming and aquaculture sec-
try. Further, oil and gas companies are impor-           tors is also based in part on knowledge devel-
tant customers for Norwegian shipping. If                oped in the same environments that the
Norwegian competitiveness in the maritime                maritime sector draws on. One example of a
sector is weakened, this will have conse-                marine/ maritime environment as described is
quences for petroleum related activities on the          SINTEF in Trondheim.
Norwegian continental shelf. Both sectors are
vital elements in national wealth creation, and
there is mutual synergy between them.

Coastal-based tourism is vital for Norway.
Tourism is closely linked to the maritime in-
dustry, mainly through the international ferry
systems, the Coastal Express and cruise activi-
ties. Cruises to Norway represent a small part
of total cruise activities, but the segment is
increasing. The number of cruise passengers
visiting Norway has increased by 168 percent
from 1997 to 2006. Companies such as Color
Line ASA complement land-based tourism with
a considerable number overnight stays.

The Coastal Express remains a very popular
attraction for cruises in Norwegian waters, and
the fjords of Western Norway retain their posi-
tion as attraction number one. This will be dis-
cussed in the government’s strategy for tour-
ism.

The fishing fleet is an integrated part of the
total marine expertise and know-how. The fish-
ing fleet comprises a total of approximately 6
800 vessels, of which 2 000 are engaged in
year-round activities. The fishing fleet is a
buyer of equipment and services from the
maritime sector, in particular the shipyards
and ships equipment segments. The fishing
fleet is also in competition with other segments
of the marine industry for skilled labour, not
least ships captains and engineers.



                               The Government's maritime strategy
                                                   -8-
                1. Globalisation and framework conditions




                                              Photo: Scanpix



  The government’s aim is to contribute to the global regulation of the maritime
industries in order to prevent tax competition, promote environmentally friendly
   solutions while simultaneously promoting secure terms of employment for
                                    employees

1.1 Globalisation
Globalisation is driven by the removal of restric-
                                                               Take the following example: a ship that was de-
tions on international trade, investments and the
                                                               signed in Norway, built in South-Korea, owned
movement of capital. The world is rapidly be-
                                                               by a listed Norwegian ship owner with Norwe-
coming a single market. Countries that were
                                                               gian and foreign shareholders, registered in Li-
previously isolated and poor are now opening
                                                               beria, operated by a Norwegian management
their economies for trade and becoming part of
                                                               company with offices in Malaysia, manned by
the global economy.
                                                               Norwegian officers and a Filipino crew, classified
                                                               by Det Norske Veritas, underwritten by British
Globalisation has contributed to a strong in-
                                                               insurers and working in liner trade between
crease in international shipping. Since 1970 the
                                                               Asia-USA-South-America in a pool arrangement
volume of goods transported on the world’s seas
                                                               with a Japanese ship owner.
and oceans has more than tripled, see figure 3.
International shipping now carries 90 percent of
                                                               Increased globalisation results in major struc-
the world trade.
                                                               tural changes in the majority of branches. The
                                                               tendency is fewer and larger global participants.
The shipping industry is characterised by multi-
                                                               Decisions concerning the company’s future
national capital, labour and technology in a
                                                               structural development, where the operating
global market. The mobility of vessels, together
                                                               units will be located and where research will be
with the establishment of open registers with no
                                                               carried out are all taken centrally at head office.
requirements for nationality has contributed the
shipping industry becoming the world’s first
truly global industry.


                               The Government's maritime strategy
                                                     -9-
Figure 3                                                            easy access to markets and good terms on-
                                                                    which to compete with participants in other
                                                                    countries.
Sea borne world trade (billion tonnes)
                                                                    This is also the reason why the government
 35 000                                                             proposes the introduction of a taxation regime
 30 000                                                             for shipping companies that is competitive in
 25 000
                                                                    comparison to the rest of Europe. At the same
 20 000
 15 000                                                             time we will take the initiative internationally to
 10 000                                                             a reduction in state tax subsidies to maritime
  5 000                                                             transport.
     0
          1 970   1 980   1 990   2 001    2 003   2 005

                                                                    1.2 International framework
                                                                    conditions
State aid to shipping companies is common in
                                                                    A major part of maritime transport predomi-
a large number of countries. From a global
                                                                    nantly takes place in international markets. It is
perspective, this favouritism results in a less
                                                                    therefore vital that international regulations are
effective economic allocation of resources.
                                                                    introduced for vessels and crews regardless of
Higher tax levels and payroll expenses in
                                                                    the country of registration or origin. Further,
Norway would probably result in that the vol-
                                                                    threats of terrorism striking the shipping in-
ume of Norwegian shipping activities would be
                                                                    dustry in recent years has emphasised the
reduced.
                                                                    need for regulations and initiatives to improve
                                                                    security and contingency measures. The UN
The government wishes to provide the right
                                                                    organisation, the International Maritime Or-
framework to ensure that the maritime indus-
                                                                    ganization (IMO), was established to prepare
try will continue to choose Norway as the host
                                                                    international regulations for safety, security
nation. If we are to succeed, the basic eco-
                                                                    and the protection of the environment in ship-
nomic conditions must be in place. High edu-
                                                                    ping activities. The UN International Labour
cational standards and beneficial social ar-
                                                                    Organization (ILO) has the task of developing
rangements are also features of the Nordic
                                                                    international regulations governing seafarer’s
social model, that contribute to reorganisation
                                                                    rights.
over time, and that make Norway attractive as
country in which to establish economic activi-
                                                                    The government’s intention is that Norway
ties.
                                                                    shall be an active instigator for secure and en-
                                                                    vironmentally friendly shipping. As one of the
It would prove difficult to maintain and retain
                                                                    world’s major maritime nations, it is in Nor-
the unique expertise and dynamics in the mari-
                                                                    way’s interest to work for a high level of safety,
time environment if ownership and head office
                                                                    unified environmental regulations, good repu-
functions are moved abroad.
                                                                    tation and global solutions.
The government therefore bases its planning
                                                                    Norway can contribute with broad, all-round
on that our maritime sectors shall be secured
                                                                    experience and expertise in the maritime area.

                                          The Government's maritime strategy
                                                           - 10 -
The government therefore wishes to be a                          Commission, The European Maritime Safety
prime mover in the work of forming interna-                      Agency (EMSA) and the member countries.
tional regulations under the auspices of the                     This co-operation is organised under the
IMO and ILO. Various segments of the indus-                      framework of the EEA Agreement.
try are actively participating in this work. High
international safety, security and environ-                      Health, environment and safety
mental standards form a barrier against com-                     Through alterations and amendments to the
petition on unacceptable terms.                                  Seaman’s Act the government has included the
                                                                 principle of non-discrimination of seamen on
In recent years the EU has engaged actively in                   board Norwegian vessels. The two new articles
developing a maritime policy, and has adopted                    of the Seamen’s Act adopted by the Norwegian
new regulations that through the EEA Agree-                      Parliament in 2007 deal with equality in the
ment also apply to Norway.                                       workplace, the ban against discrimination and
                                                                 rules governing the sharing of information and
The EU maritime green book                                       consultation with the of the company elected
                                                                 labour representatives.
The European Commission presented its maritime
green book in 2006. The green book touches on key
Norwegian interests, both within and outside the                 There is a ban on direct and indirect discrimi-
framework of the EEA Agreement, among these                      nation on the basis of politics, membership in a
shipping, the fisheries, the environment, maritime               labour union, sexual orientation, disability or
law, research and tourism.
                                                                 age. The ban on discrimination applies to all
The green book is linked to the EU’s Lisbon Strat-               facets of employment, from advertising of va-
egy, and shall stimulate wealth creation, competi-               cancies and until the employment comes to an
tion, and employment, protection of the environment
and safety and security in relation to the EU’s ocean            end. The regulations will reinforce the rights of
and sea areas.                                                   seafarers. The changes came into force on
                                                                 March 1st 2007.
The key question in the green book is whether
Europe can afford to manage its oceans and seas in a
sectoral unconnected way or has the time come to                 The ILO adopted a new convention on the
establish a truly integrated maritime policy. The                working and living conditions for seafarers in
document has been out for public consultation, and
the Norwegian comments were sent to the European                 2006. The convention collates and updates 68
Commission in April 2007. The European Commis-                   different ILO conventions and recommenda-
sion will prepare a more concrete proposal for rules             tions. The material content covers minimum
and regulations and other measures in the autumn of
2007.                                                            age, health requirements, employment agency
                                                                 services, employment contracts, wage pay-
The accident involving the vessel Erika in 1999                  ment, working hours and rest periods, holi-
when large areas of the French beaches were                      days, home travel, cabins and leisure areas on
polluted by oil resulted in an increased level of                board, food and diet, medical services, the ship
attention being focussed on safety at sea in                     owner’s responsibilities in case of illness and
Europe. In the work of developing the interna-                   injury to persons, requirements to the working
tional regulations, Norway works in close co-                    environment and the prevention of industrial
operation with The European                                      accidents, welfare centres in ports, social



                                    The Government's maritime strategy
                                                        - 11 -
security arrangements for medical nursing and                        The industry has a long delivery time span
sickness and industrial injury benefits.                             from the time an investment decision is
                                                                     reached to when the investment is actually
The government has decided that a Proposi-                           made.
tion to the Odelsting (Parliament) with the
necessary legislative changes and a Govern-                          This means that the requirement for long-term
ment White Paper on the ratification of the                          financing is high. We have a number of banks
Convention shall be prepared.                                        in Norway that are world leaders in maritime
                                                                     financing.
Framework conditions for ship-
building                                                             Norway’s state-supported export financing
Norway is an active participant in the OECD’s                        arrangements consist of the so-called 108
work on shipbuilding. China and Taiwan par-                          arrangement and guarantees under the
ticipate in this co-operation, and both countries                    Guarantee Institute for Export Credit)
are in the process of developing large and                           (GIEK). The arrangement is regulated by the
comprehensive shipbuilding industries or have                        OECD’s Arrangement on Officially Supported
a special focus on the industry. The govern-                         Export Credits (see box). The Maritime sec-
ment’s aim in this work is to contribute to                          tors are major users of both the 108 arrange-
combating international competition based on                         ment and guarantees under GIEK, but ques-
subsidises, and at the same time ensuring that                       tions linked with export financing are also of
Norwegian yards have good framework condi-                           major importance to trade and industry in gen-
tions.                                                               eral.

Negotiations on an international agreement on normal                 The government has initiated an investigation
terms of competition in the shipbuilding industry.                   into the public support offered in connection
                                                                     with export financing in Norway. The 108 ar-
Negotiations commenced in 2002 on an agreement on
normal terms of competition in the shipbuilding indus-               rangement was assessed in 2007, and one is in
try. The negotiations also included a number of coun-                the process of implementing an assessment of
tries that are not OECD members, among these China,                  GIEK. In carrying out this work the govern-
and according to the timetable were to finalise by the
close of 2005.                                                       ment wishes to secure good export financing
                                                                     terms for Norwegian exporters.
In September 2005 the parties were still far from each
other in key areas. A decision was therefore made to
postpone the negotiations until further notice in order              OECD Arrangement on Officially Supported Export
to give the parties time to reflect on their standpoints.            Credits (Consensus agreement) and public export fi-
Efforts are being made to find a basis on which the                  nancing.
talks can be resumed under the leadership of Norway’s
Ambassador to the OECD.                                              About the agreement
                                                                     Credit markets in many countries are poorly devel-
Export financing                                                     oped, and it is therefore important that exporters that in
                                                                     addition to the exported product also can offer the
The maritime industry is typified by that it is                      purchaser a financing package. To secure an equal
capital intensive and that real capital (the in-                     framework conditions for this type of financing, the
                                                                     consensus agreement regulates the terms and condi-
dustries fixed assets) has a long life.                              tions of the financing package.



                                     The Government's maritime strategy
                                                            - 12 -
In addition to the actual consensus agreement, there               Tax-based competition
are also dedicated sector agreements for shipbuild-                The EU/EEA regulations for state support
ing, aircraft and a nuclear power plants In Norway's               allow for favourable taxation of shipping com-
case it is only the sectoral agreement for shipbuild-
ing that these of importance. This sector agreement                panies and seafarers than that permitted for
came into force from 2002.                                         other industries. Shipping activities are also
                                                                   exempted from taxation to a high degree in the
The 108 Agreement
According to the OECD Consensus Agreement,                         rest of the world, as activities are organised
member states can offer officially supported export                through companies in countries where tax is
credits on CIRR (Commercial Interest Reference                     not levied.
Rate) terms. Norway introduced its CIRR scheme in
1978, the so-called 108 Agreement. The CIRR is
based on the government bond rate for the particular               The government is of the opinion that such tax
country's currency, plus 1 percentage point. In 2002               competition between countries is unfortunate.
Norway opened up for the use of CIRR-terms for
exports of ships. Eksportfinans ASA administrates
the 108 Agreement, and is the sole provider of offi-               The government will work for the discontinua-
cially supported export credits in Norway.                         tion of tax competition in shipping in interna-
Guarantees                                                         tional organisations (OECD, WTO).
GIEK on behalf of NHD administers the state guar-
antee arrangements. There are two guarantee ar-                    Not all shipping activities that are eligible for
rangements that are relevant for ships and ships
equipment: the general arrangement and the building                state aid in Europe are directly exposed to
loan guarantee arrangement for ships. The general                  global competition. In its comments to the
guarantee arrangement can be used to cover risks                   EU’s maritime green book, the government
that would be difficult to cover in the private market.
This includes all kinds of risks, apart from commer-               said that the various State aid and relief ar-
cial risks for credits to purchases in OECD countries              rangements have created an unfortunate com-
with a term of less than two years. The guarantee                  petitive situation in ferry traffic between EEA
limit for the general arrangement was increased in
2007 from NOK 40 to 50 billions. Guarantees cover                  countries. Although it may prove difficult to
all branches, of which the largest as of May 2007 is               achieve a breakthrough for a comprehensive
shipped equipment (24 percent), drilling rigs (12                  revision and changes in the guidelines for state
percent) and supply ships (12 percent). The building
loan guarantee arrangement for ships is discussed                  aid to shipping in the short term, the govern-
later in this chapter.                                             ment will continue to take up this theme with
                                                                   the European Commission.

1.3 Norwegian framework                                            The most natural arena for a European initia-
Shipping is a global and mobile industry, and                      tive for an international agreement on the limi-
the location of activities is therefore sensitive to               tation of state support/subsidies to shipping
the framework conditions offered.                                  will be the WTO.

Many countries, including our nearest                              Work is in progress in the WTO to negotiate
neighbours, prepare the terrain for attracting                     an agreement that would discipline the use of
maritime activities through for example the                        subsidies in the service industries in general.
introduction of tonnage tax arrangements.




                                     The Government's maritime strategy
                                                          - 13 -
                                                                   The government therefore propose that a new
The EEA Agreement’s regulations for government
grants to maritime transport                                       shipping tax arrangement based on the Euro-
                                                                   pean model is introduced with effect from the
The regulations for government grants in the EU,                   fiscal year 2007. For more detail please refer to
which also encompass Norway through the EEA
Agreement, provide the framework for the taxation                  Proposition to the Odelsting (Parliament)No. 1
of maritime transport in Europe. The EU grants                     (2007-2008) Taxation, public charges and cus-
exemption from the ban on government grants in the                 toms tariffs resolution.
EEA Agreement for maritime transport and allows
tax exemption down to zero tax for ship owners and
seafarers. For other commercial enterprises and
industries the norm is no government grants in the
                                                                   The new shipping taxation arrangements will
form of special tax relief. The original guidelines                increase profitability of operating shipping ac-
were adopted in 1997. The European Commission                      tivities in Norway, and will be in line with the
revised the guidelines for government grants to
shipping in 2004. The revised guidelines apply until
                                                                   arrangements in other EU countries.
2011.
                                                                   Employment of seafarers
The purpose of the guidelines is to ensure competi-
tiveness, wealth creation, employment and good                     Grant arrangements for the employment of
contingency arrangements in European shipping                      seafarers will secure Norwegian maritime ex-
sectors. The global situation with regard to competi-              pertise and the recruiting of Norwegian seafar-
tion and the terms and conditions that apply to com-
petitors outside Europe are central elements in the                ers, and in addition contribute to that Norwe-
reasoning behind the guidelines. The inherent mobil-               gian ship owners have competitive conditions
ity of the industry with the use of open ships regis-              in relation to conditions in other countries. The
ters, location of ownership of vessels to so-called tax
havens/low tax countries and the use of manpower                   government has actively contributed to this
from low cost countries are key words here further,                through its budgets.
the guidelines ensure the harmonisation of state aid
arrangements among EU countries.
                                                                   It is proposed in the national budget for 2008
                                                                   that the state aid arrangement for seafarers is
Taxation of shipping companies                                     increased by NOK 380 millions to NOK 1.710
The maritime industries operate in interna-                        billions.
tional and highly competitive markets. Ship-
ping is a highly mobile industry, and is ex-                       This is an increase from the balanced budget
posed to tax competition internationally. In                       2007. The means have been allocated for
both the European Union and the rest of the                        measures that contribute to secure employ-
world the shipping industry pay little or no tax                   ment of Norwegian seafarers.
on its activities.
                                                                   State aid arrangements encompassed 9 300
If Norway is to maintain and develop its posi-                     seafarers in 2005. This increased approxi-
tion as one of the leading maritime nations in                     mately to 10 000 in 2007. Average annual pay-
the world, it is necessary to work to attain fixed                 ments per employee under the arrangement
objectives.                                                        are NOK 150 000.

The current taxation arrangement for shipping                      Current refund and net wage arrangements
does not stimulate new investments in Norwe-                       encompassed a range of rates, differentiated
gian shipping.


                                     The Government's maritime strategy
                                                          - 14 -
between types of positions, groups of vessels,               The Norwegian ship registers
and vessels registered in the Norwegian Inter-               The government has the aim of ensuring that
national Ship Register (NIS) and the Norwe-                  as many Norwegian-owned vessels as possible
gian Ordinary Ship Register (NOR). Viewed in                 are registered in the Norwegian registers NIS
totality the current arrangements do not ap-                 and NOR. When vessels are registered in
pear to express clear prioritising, but rather as            Norway, the national authorities can better
a group of the individual arrangements. In or-               control that the vessel meets with the required
der to receive grants, the other terms and con-              safety, environmental and labour-related stan-
ditions of the arrangements must be fulfilled,               dards. Apart from this, a large fleet under
among these that shipping companies encom-                   Norwegian jurisdiction also increases the po-
passed under the net wage arrangement pay a                  tential for exerting influence on international
sum per employee per month to the expertise                  regulations relating to safety and security, the
fund under the auspices of the Foundation                    environment and working conditions in fora
Norwegian Maritime Expertise.                                such as the IMO, ILO and in the EU. This
                                                             means among other things that Norway can
The government will invite the Foundation’s                  exercise influence on future international and
governing body and the industry to participate               regional environmental and safety require-
in discussions of the level, future application              ments in maritime transport.
and prioritising of the income of the Expertise
Fund.                                                        It is first and foremost Norwegian ship owners
                                                             that choose the NIS flag. In recent years we
Work permits for seafarers                                   have seen a gradual but steady reduction in the
In the Soria Moria Declaration is stated that                numbers of NIS vessels, see figure 4. The main
the government would introduce the require-                  reason for this is that Norwegian ship owners
ment for work permits for foreign seafarers on               have either moved out or relocated ownership
vessels sailing under foreign flags that trans-              outside Norway.
port passengers or goods between Norwegian
ports.                                                       Ship owners who still have their head offices in
                                                             Norway, but establish shipping companies
The background for the need to introduce                     abroad, often choose to register under foreign
such legislation is to combat social dumping                 flags. One reason for this is the requirement
and secure fairer and more equal competition                 for activities in the country where the compa-
in Norwegian domestic maritime transport.                    nies are located.

The Ministry of Labour and Social Inclusion is               This is the most important reason why growth
working on a proposal for the changes neces-                 in the Norwegian controlled fleet occurs under
sary in the regulations governing foreign na-                foreign flags.
tionals within the framework of international
obligations Norway has in this area. A proposal              It is important that the NIS register continues
was sent for a broad hearing in the autumn of                to present itself as an attractive quality register.
2007.                                                        The development of good communications
                                                             solutions, more user-friendly and efficient


                               The Government's maritime strategy
                                                    - 15 -
services, and the ongoing adaptation of activi-                                                    with new-buildings and conversions of vessels.
ties to new technology and information re-                                                         The risk is shared equally between the banks
quirements have been, and remain, relevant                                                         and GIEK. The demand for building loans rose
measures for strengthening the NIS register.                                                       dramatically towards the close of 2006. This
The Norwegian Ship Registers have concen-                                                          was connected with the large influx of orders
trated on the marketing of the NIS register in                                                     to Norwegian shipyards. The guarantee
recent years.                                                                                      framework for the scheme was therefore in-
                                                                                                   creased from NOK 2.5 billions to NOK 5 bil-
                                                                                                   lions early in 2007.
Figure 4

   NIS 2003-2007(Number of vessels)                                                                1.4 Market access
                                                                                                   International shipping is not fully included in
                                                                                                   the services agreement in the WTO. Only a
   760                                                                                             small number of the WTO’s 151 member
   740                                                                                             countries have taken on liberalisation com-
   720
   700                                                                                             mitments for shipping. Norway is amongst the
   680                                                                                             countries that have assumed obligations, while
   660
   640
                                                                                                   key WTO members such as the USA, EU, In-
   620                                                                                             dia and Brazil have no commitments for ship-
   600                                                                                             ping in WTO. Norway is engaged in finding
         mar.03



                           mar.04



                                             mar.05



                                                               mar.06



                                                                                 mar.07
                  sep.03



                                    sep.04



                                                      sep.05



                                                                        sep.06




                                                                                                   solutions that accommodate the need for in-
                                                                                                   ternational regulation of the market conditions
                                                                                                   in shipping. The market for international ship-
                                                                                                   ping is basically relatively open.
In 2008 the government will allocate an extra
NOK 3 millions to marketing the NIS register                                                       The government is working to remove the
in order to attract tonnage.                                                                       remaining restrictions and bind current prac-
                                                                                                   tice, so that there is a set of regulations to re-
The building loan guarantee                                                                        late to in cases of breaches of agreements, and
arrangement                                                                                        to prevent the re-introduction of protectionist
Through the building loan guarantee ar-                                                            measures.
rangement for vessels, GIEK can offer building
loans to shipyards to finance the building proc-                                                   An increasing number of countries are enter-
ess up to the delivery of the vessel.                                                              ing into bilateral trade agreements.

The background of the scheme is that a gov-                                                        This trend can cause that Norwegian manufac-
ernment-backed risk deferment instrument is                                                        turers and exporters are discriminated against
necessary in order to secure sufficient building                                                   in vital markets. Norway also enters into simi-
loans for the yards and thus contracts for Nor-                                                    lar agreements through EFTA. A central objec-
wegian yards. The scheme relieves the banks                                                        tive of the free EFTA trade agreements has
of up to 50 percent of the risk in connection                                                      therefore been to prevent discrimination
                                                                                                   against EFTA’s export companies in relation to

                                                                The Government's maritime strategy
                                                                                          - 16 -
exports from other countries. The EFTA free                            The Norwegian maritime industry has tradi-
trade agreements aim to eliminate both cur-                            tionally enjoyed a first class reputation.
rent and potential discrimination against our
goods and services, and are therefore impor-                           This is due in the first instance to the scope
tant tools in boosting Norwegian commercial                            and quality of goods and services, and the
and industrial activities in a global marked.                          marketing and profiling of the various partici-
EFTA third country agreements are of impor-                            pants. The government nonetheless believes
tance to shipping.                                                     that there is a need to improve the co-
                                                                       ordination of the profiling activities.
Bilateral shipping agreements are negotiated
on the basis of concrete Norwegian interests                           Currently several countries compete to attract
and to achieve equality in access to markets                           maritime companies. By attracting shipping,
with agreements negotiated by the EU                                   they hope to be able to develop their own mari-
                                                                       time clusters and increase employment in as-
The trade agreement between Norway/EFTA and Canada                     sociated maritime activities, among others
                                                                       equipment manufacturing, financing and clas-
EFTA and Canada have agreed on a trade agreement. The
agreement removes all customs duty on industrial goods                 sification.
and introduces a number of simplifications for trade be-
tween the signatories. In the course of time Canada will               Singapore is already one of the most important
phase out customs tariffs on all ships and boats. Norway
will thus enjoy an important competitive advantage in the              shipping centres in global terms, and the coun-
Canadian market. Canada is Norway’s third largest trad-                try is highly focussed on attracting maritime
ing partner after the EU and USA. Norway exported                      companies and ship owners. In addition to
goods worth more than NOK 24 billions to Canada in
2006. Total joint trade in 2006 was NOK 35.5 billions.                 Singapore, Hong Kong, South Korea and Can-
Because of the high volume of trade, a trade agreement                 ada are all actively engaged in attracting a
with Canada will no doubt contribute to an increase in                 greater number of maritime companies.
wealth creation for Norwegian companies. Canadian
customs tariffs on ships are not fixed in the WTO, which
means that Canada is free to introduce increases at any                Profiling of the maritime industries abroad has
time. Current tariffs in this area stand at 25 percent.                two objectives. The marketing efforts of Nor-
                                                                       wegian participants in foreign countries will be
The trade agreement means that customs duty will be
removed on a number of ships and will be gradually be                  supported, and Norway will be profiled as a
reduced for ships and other floating installations that are            host nation for maritime activities.
sensitive for the Canadian shipping industry. In the longer
term this will provide new opportunities for Norwegian
shipyards.                                                             The government will request that Innovation
                                                                       Norway, in co-operation with the Norwegian
Profiling of the maritime industry                                     Ships registers, the Norwegian Maritime Di-
In the current global situation regarding com-                         rectorate and participants in the maritime in-
petition, the various countries’ maritime indus-                       dustry develop a joint strategy for marketing
tries compete not only on products and ser-                            and market profiling of Norway abroad.
vices, but also to a high degree on the basis of
reputation.




                                        The Government's maritime strategy
                                                              - 17 -
Blue Denmark
                                                                      •   The government will commence work
In 2006 the Danish authorities presented a plan of action                 on a review of the government-backed
“Blue Denmark” with the ambition of making Denmark
Europe’s leading maritime nation. The plan of action                      export financing system in Norway.
focuses on improved educational and recruiting for trade
                                                                      •   The government will continue the net
and industry, research, innovation, taxation and financing
of development (they to plan the remove two taxes: tax                    wage arrangements for seafarers.
on profits on the sale of ships and tax on shipping compa-
nies), reductions on administrative burdens and fewer                 •   The government will re-introduce the
exclusively Danish regulations, the promotion of Danish                   requirement for work permits for for-
influence and market access, increased focus on quality                   eign seafares on ships under foreign
shipping and an efficient, service oriented and modern
administration.                                                           flags.
                                                                      •   The government will continue the
Measures and initiatives                                                  building loan guarantee scheme for
    •    The government will work against sub-                            ships under GIEK.
         sidy and tax competition in shipping                         •   The government will request that In-
         through international organisations                              novation Norway, in co-operation with
         (OECD, WTO), and will take the initia-                           the Norwegian Ships registers, the
         tive to a reduction of the state aid ar-                         Norwegian Maritime Directorate and
         rangements for ferry traffic between EEA                         participants in the maritime industry
         countries.                                                       develop a joint strategy for marketing
    •    The government will introduce a ship-                            and market profiling of Norway abroad.
         ping taxation arrangement based on the                       •   The government will vitalise the mar-
         European model with effect from the fis-                         keting of the NIS register and has al lo-
         cal year 2007. Please refer to Proposition                       cated NOK 3 millions in the budget for
         to the Odelsting (Parliament) No. 1                              this purpose.
         (2007-2008) Taxation, public charges and
                                                                      •   Norwegian authorities will work ac-
         customs duties resolution
                                                                          tively in co-operation with other ship-
    •    The government will continue the role                            ping countries to have shipping fully
         Norway has as an instigator in the devel-                        included in the services agreement in
         opment of international regulations for                          the WTO.
         shipping in the IMO and ILO in close co-
                                                                      •   The government will negotiate new
         operation with the other member coun-
                                                                          free trade agreements under the aus-
         tries and the institutions of the EU.
                                                                          pices of EFTA in order to protect the
    •    The government will propose to the the                           competitiveness of Norwegian com-
         Storting that Norway shall ratify the ILO                        merce and industry, hereunder our
         Convention on the working and living                             shipping interests.
         conditions of seamen (The Consoli-
                                                                      •   The government will negotiate a bilat-
         dated Maritime Labour Convention)
                                                                          eral shipping agreement with India.
         at the earliest opportunity.)



                                       The Government's maritime strategy
                                                             - 18 -
          2. An environmentally friendly maritime industry




                           Photo: Viking Avant, Eidesvik ASA. Photographer: Harald Valdehaug




The government’s aim is that the Norwegian maritime industry shall be the
world’s most environmentally friendly and lead the way in the development
                            of new solutions

2.1 Environmental challenges                                     The composition of the fleet, with regard to
Shipping has an advantage compared to other
                                                                 both desired functionality and age spread
forms of transport: ships have the ability to
                                                                 makes generalisations difficult in connection
transport large volumes of goods with a high
                                                                 with the reduction of the total emissions.
level of energy efficiency and low emissions.
In addition the infrastructure of transport by
                                                                 A ship has a life expectancy of more than 20
sea means that encroachments in nature are
                                                                 years. This places great demands on future-
limited. This notwithstanding, there are a
                                                                 oriented environmentally friendly and safe
number of environmental challenges linked to
                                                                 ships. This represents both a challenge and
shipping, amongst these the operational
                                                                 an opportunity for the whole of the Norwe-
emission of a number of pollutants to the sea
                                                                 gian maritime environment. Increased focus
and air, and in the case of accidents at sea
                                                                 on environmentally friendly solutions in mari-
there is a risk of severe pollution.
                                                                 time activities means that ships are designed,
                                                                 built, equipped, operated and recycled using
The composition of the fleet, national and in-
                                                                 methods that result in the absolute minimum
ternational, is complex and a range of vessels
                                                                 possible emissions.
of different types covers a number of func-
tions.
                                                                 The Norwegian Shipowners Association has
                                                                 developed a zero-emission vision. This is an
The demand for transport services is depend-
                                                                 important and ambitious vision.
ent on activity levels in Norwegian and inter-
national economy.


                               The Government's maritime strategy
                                                        - 19 -
The vision will be realised through the devel-              arrangement based on the European model in
opment of technology and efforts to achieve                 the budget for 2008 for ship owners to invest
strict international legislation. The govern-               in environmental initiatives. This will result in
ment will support these efforts. The Norwe-                 an increase in investments in environmentally
gian shipbuilding and ships equipment indus-                friendly solutions in Norwegian shipping.
try has an independent responsibility to
contribute positively to environmentally                    During the phasing period of the new ar-
friendly solutions. The aim is to lead devel-               rangement, ship-owners will have to adhere to
opments in order to meet the increasing de-                 a repayment schedule for previously accrued
mand for environmentally friendly solutions,                tax credits. Part of these tax credits can how-
as soon as such solutions are demanded to a                 ever be used by the individual company as
sufficient degree to justify commercialisation.             allocations to funds for environmental initia-
                                                            tives etc. This will result in an increase in in-
There are few incentives for the shipping in-               vestments in environmentally friendly solu-
dustry to choose environmentally friendly                   tions in Norwegian shipping.
solutions that exceed the minimum standards
laid down in international regulations. Some                The government will carry out an examina-
major buyers of transport services do how-                  tion of the environmental differentiation sys-
ever insist on higher standards for vessels                 tem in order to among other objectives in-
carrying their goods, for example IKEA and                  clude greenhouse gasses. One should strive
Toyota. The Norwegian shipbuilding and                      to achieve an environmental differentiation
equipment sectors would be well served with                 system that also has value as transferable to
Norway taking a leading position in pressing                other taxes and charges. The indicators in
for higher environmental standards interna-                 such a system should be introduced interna-
tionally, and that Norway implements interna-               tionally, so that these have transferable value
tional regulations at the earliest opportunity.             to the incentive systems of other countries. In
                                                            order to contribute to the transfer of goods
The shipping company taxation arrangement                   from road to sea, the government will carry
has an environmental element in the form of                 out a total assessment of all charges and taxes
environmental differentiation in tonnage tax.               in sea transport compared to other forms of
The arrangement is voluntary, and only af-                  transport. The applicability and potential for
fects shipping companies’ environmental in-                 environmental differentiation will also be
vestments to a small degree. This differentia-              evaluated in connection with the assessment.
tion functions as a positive incentive for those
that have already taken emission-reducing                   One is considering the introduction of stricter
measures. The level of the differentiation of               environmental standards in connection with
tonnage tax and thus the environmental dif-                 the state’s purchases of sea freight and sea
ferentiation in itself do not in themselves en-             passenger transport services, which is in ac-
courage a high volume of new investments.                   cordance with the Climate Report.

There are strong incentives in connection                   The government wishes to increase aware-
with the government’s proposals for a new tax               ness in order to secure more energy-efficient


                               The Government's maritime strategy
                                                   - 20 -
design and operation of vessels in the future.                          2.2 Emissions to air
We currently know little about the actual                               Coastal shipping and fisheries emit roughly
emissions from individual vessels. The gov-                             40 percent of Norway’s total emissions of ni-
ernment will, in co-operation with the indus-                           trogen oxides (NOx) and 15 percent of sul-
try, develop a system under which each ves-                             phur emissions, see figure 5. NOx is formed
sel will produce an overview of its emissions.                          during the combustion process in engines,
This also encompasses reporting to the rele-                            gas turbines and furnaces. NOx contributes to
vant authorities.                                                       acidification and ground proximity ozone and
                                                                        can also function as a fertilizer and cause eu-
The government will continue Norway’s ac-                               trophication.
tive role as initiator in the IMO for the map-
ping of emissions from international shipping,                          Figure 5
and for the introduction of a obligatory regime
within the next few years for a reduction of                             Emissions of nitrogen oxides in Norway for
                                                                                   various sources 2005
greenhouse gasses by all parties regardless of
flag state.
                                                                                            10 %
International environmental rules                                                      9%            26 %


Roughly 50 percent of the world tonnage sails under flags
of convenience, and just over 20 percent under flags of                              19 %
                                                                                                      15 %
developing countries. It is therefore vital for the shipping
industry that the IMO is a dynamic organ that imposes                                         21 %
international standards for both environmentally friendly                      Coastal Trafic           Fisheries
and safe transport by sea.                                                     Petroleum Industry       Road haulage
                                                                               Industry                 Others
The IMO Convention MARPOL (The International Con-
vention for the Prevention of Pollution from Ships
(73/78)) regulates emissions from vessels. Annex VI in                  In 2002 Norway ratified the Protocol to Abate
MARPOL regulates emissions of ozone destructive gas-                    Acidification, Eutrophication and Ground-
ses, NOx, SO2 and VOC (Volatile Organic Compounds).                     level Ozone (The Gothenburg Protocol). Pur-
IMO’s environmental committee is revising the complete
regulations relating to air pollution (MARPOL Annex                     suant to the Gothenburg Protocol, Norway
VI). Norway’s aim is that stricter standards will be intro-             has an obligation to reduce its annual emis-
duced in the regulations for all sources of emissions and               sions of NOx to maximum 156 000 tonnes by
that particle standards are also included.
                                                                        2010.
Through the preparations made by Norway to
                                                                        The preliminary figures for 2006 show that
IMO meetings and through the IMO’s deci-
                                                                        emissions of NOx are 194 000 tonnes. Annual
sion making processes, a number of elements
                                                                        emissions must therefore be reduced by 38
are under evaluation, amongst these whether
                                                                        500 tonne, or roughly 20 percent.
the proposed initiatives are cost-effective,
technically practical and implemental, and
                                                                        A NOx -levy was introduced with effect from
competition distorting.
                                                                        January 1st 2007 that encompasses approxi-
                                                                        mately 55 percent of emission sources in Nor-
                                                                        way.

                                         The Government's maritime strategy
                                                               - 21 -
The Parliamentary levy bill included a clause             standards that currently apply to engines in-
that emission sources that are included under             stalled after 2000.
environmental agreements with the state on
the implementation of NOx reducing meas-                  In the case of engines installed in vessels after
ures in accordance with stipulated environ-               2010/2011, Norway proposes an emission
mental goals, can be exempted from the levy.              standard that lies 20-25 percent under today’s
The Confederation of Norwegian Enterprise,                standard, while engines installed after 2015
together with organisations that represent the            shall be subjected to even more stringent
branches to whom the levy applies, has put                standards and that emissions should be re-
forward a proposal for such an agreement.                 duced by 40-50 percent from current levels.

The government will continue the compensa-                In 2005 costal shipping and the fisheries rep-
tory arrangements for the most affected                   resented about 15 percent of sulphur emis-
branches. In the case of the fishing fleet and            sions generated in Norway. Sulphur dioxide
shipping, NOxRED schemes have been in-                    leads to acidification. Sulphur emissions from
troduced under which the state provides gov-              shipping are regulated under the MARPOL
ernment support for investments in emission-              Annex VI on emissions to air. The regulations
reducing measures.                                        provide the option of establishing special ar-
                                                          eas, so-called SECAs (Sulphur Emission Con-
The NOxRED scheme for shipping was ap-                    trol Areas) with more stringent requirements
proved by the EFTA Surveillance Authority                 for sulphur content in oil. The North Sea will
ESA in February 2007. The NOx-RED                         be one such area from August 2007.
scheme applies for the period 2007-2009 with
a framework of NOK 50 millions.                           Global standards should be introduced by
                                                          2015 at the latest for the use cleaner fuels (dis-
In addition to the compensation schemes, the              tillates) with sulphur content of less than 0.5
government will increase efforts in research              percent. The distillate standard, which was
and development to stimulate the develop-                 introduced by INTERTANKO, is a cause of
ment of NOx-reducing technologies.                        controversy in IMO. With the support of
                                                          Norway, IMO’s Secretary-General has ap-
The government wishes to see the establish-               pointed an expert group with a mandate to
ment of stricter international NOx -standards             assess the potential for the implementation of
for new engines and those standards are in-               and consequences of the various proposals
troduced for older engines. If no standards               put forward for future regulations. If the pro-
are introduced for existing vessels, one will             posal is implemented, sulphur emissions from
not see any significant reduction in NOx-                 shipping will be reduced by 12 million ton-
emissions from shipping activities for a many             nes.
years.                                                    In other words, sulphur emissions from inter-
                                                          national shipping will be reduced from in ex-
Norway therefore proposes that large, low                 cess of 15 million tonnes to less than 3 million
speed engines that were installed in vessels              tonnes.
prior to 2000 shall meet with the same


                              The Government's maritime strategy
                                                 - 22 -
The measure will probably also result in a                     these emissions. The IMO is working on the
reduction in NOx emissions of 10-15 percent.                   development of mechanisms that will contrib-
Mandatory standards imposed on distillates                     ute to a reduction in greenhouse gas emis-
will result in that oil spills resulting from ship-            sions from international shipping.
ping accidents such as groundings and colli-
sions will have totally different effect in that               Figure 6
lighter oils behave physically differently from
heavy oils. The use of cleaner fuels will thus                  Emissions of greenhouse gasses 1990-
contribute to easier and safer clean ups after                      2006. Carbon dioxide (CO2)
accidents. It is estimated that negotiations in                            20000
connection with the ongoing revision in IMO                                15000
will be completed during the course of 2008.



                                                                1000 Ton
                                                                           10000

The government has given its support to IN-                                5000
TERTANKO’s proposal, and will work for the                                    0
proposal in IMO.

                                                                                   1990

                                                                                          1992

                                                                                                 1994

                                                                                                        1996

                                                                                                                 1998

                                                                                                                        2000

                                                                                                                               2002

                                                                                                                                      2004

                                                                                                                                             2006
                                                                                                               Year

2.3 Greenhouse gasses                                                  Mobile combustion, total           Emmissions from shipping

Gasses that contribute to the greenhouse
effect are first and foremost CO2, methane,                    The work is difficult, both politically and in
nitrous oxide and fluoride gasses.                             relation to the establishment of good mecha-
                                                               nisms.
Emissions of CO2 from coastal shipping rep-
resent about 5 percent of Norway’s total                       Norway wishes to see that the IMO estab-
greenhouse gas emissions and 24 percent of                     lishes binding standards for international
the total emissions from the transport sector,                 shipping regardless of which country the ves-
see figure 6. These emissions form part of the                 sel is registered in. If agreement is not
national greenhouse gas account, and are                       reached under the auspices of the IMO on a
encompassed under the Kyoto Protocol.                          climate regime in the very near future, the
                                                               government will work for the introduction of a
In a global perspective, CO2 -emissions from                   mandatory regime for the whole of the inter-
international shipping are estimated to be 2-3                 national shipping sector under the Climate
percent of the total CO2 -emissions. Emissions                 Convention.
of CO2 from regional shipping are subject to
the CO2- levy of NOK 200 per tonne CO2 and                     The government will continue to promote
mineral oil levy.                                              Norway’s role as initiator in IMO for the chart-
                                                               ing of emissions in international shipping, and
International shipping is not included under                   for the adoption within a few years of a bind-
the Kyoto Agreement. One of the reasons for                    ing and mandatory regime for the reduction
this is that it was difficult to achieve agree-                of greenhouse gas emissions from all vessels,
ment on the distribution of responsibility for                 regardless of flag state.


                                 The Government's maritime strategy
                                                      - 23 -
Norway has proposed and developed a CO2 -                    Gas-powered ships are dependent on the
index for vessels. The index was adopted by                  availability of gas/fuel. One therefore needs
the IMO in 2005, and introduced as a volun-                  Liquid Natural Gas (LNG) ship bunkering
tary trial arrangement until 2008. As yet it is              stations along the coast. The infrastructure for
too early to say how such indexes can be im-                 LNG distribution will increase the availability
plemented to regulate the industry.                          of gas, and contribute to that gas will become
                                                             more readily available for use in shipping.
The index can in any case be used to energy-                 Companies that wish to build infrastructure,
optimise ship operation, which in turn will                  can apply to Enova for grants.
result in a reduction of emissions. At this point
in time very few ships have taken such in-                   The grant scheme administered by Enova can
dexes into use.                                              contribute to that in the course of time gas is
                                                             made available in an increasing number of
It is desirable that CO2 -emissions are mapped               locations.
for more ships. The government will take the
initiative to establishing co-operation with the             2.4 New technology
industry on how such indexing can be im-                     The government deems it to be vital that ef-
plemented.                                                   forts are also concentrated on the develop-
                                                             ment of new, environmentally friendly alterna-
There are ongoing discussions in the IMO                     tive energy sources that can be utilised in
Environmental Committee on a possible mar-                   shipping. Shipping in the years ahead must
ket-based system for greenhouse gas reduc-                   become more energy-efficient than is cur-
tions throughout the shipping industry.                      rently the case.

In the work of reducing greenhouse gas                       If satisfactory solutions are to be found, there
emissions by the shipping industry, Norway                   must be co-operation between shipping com-
shall be an innovator and shall develop and                  panies, shipyards, equipment suppliers, the
propose both market-based tools and regula-                  authorities and research institutions.
tory standards.
                                                             CO2 -emissions from ships can be reduced
The environmental gains in gas-fuelled opera-                over time by reducing fuel consumption and
tion are considerable. Natural gas is a clean                the use of alternative fuels. The use of fuel
fuel, and emissions of soot, smoke and parti-                cells will result in zero NOx-emissions, and
cles are to all intents and purposes close to                emissions of CO2 could be reduced to 40 – 45
zero. Emissions of NOx are reduced by in the                 percent of similar energy production based on
region of 90 percent. Likewise, there are no                 diesel fuel. There is ongoing development and
emissions of SOx in that the gas is free from                trials of fuel cells for use in the transport sec-
sulphur content. Emissions of CO2 lie 20 – 25                tor and stationary and mobile power supplies
percent below emissions from equivalent die-                 in several countries. Fuel cells convert energy
sel engines.                                                 inherent in hydrogen or natural gas into elec-
                                                             tricity, heat or both.



                                The Government's maritime strategy
                                                    - 24 -
                                                                2.5 Other emissions from
The largest fuel cell project currently under
way in Norway is FellowShip, a co-operative                     shipping
project led by Det Norske Veritas. FellowShip                   Transport by sea can also have a negative
is an attempt to develop fuel cell systems for                  effect on the environment through the dis-
use by ships, in the first instance based on                    charge of operating waste to the sea (oil, re-
natural gas (see description of the project in                  fuse, sewage etc), leaching from anti-fouling
section 4).                                                     surface coatings and the introduction of non-
                                                                native species ballast water and ships hulls.
Hybrid-vessels are an option for some types of
ships, and among other things electrically                      The degree of the effects will depend on the
powered propulsion systems have been in-                        volume and frequency of the influencing fac-
stalled on a number of cruise ships. This                       tors and vulnerability of the environment.
means that the combustion engine or gas
turbine transfers energy to the electricity                     The introduction of non-native organisms is
generator that in turn drives the propellers                    now considered to be one the most serious
and supplies the remainder of the ship’s en-                    threats to the biological multiplicity in marine
ergy needs.                                                     ecological systems.

Hybrid vessels can prove to be an important                     Introduced species can represent a threat to
contribution in reducing local pollution from                   the ecological system and valuable marine
shipping, but do not result in significant re-                  resources in a variety of ways.
ductions in emissions of CO2.
                                                                The government will prepare a set of national
The use of solar energy and modern forms of                     regulations for handling ballast water that will
wind power are exciting solutions for an even                   be in accordance with the International Con-
more environmentally friendly shipping in-                      vention for the Control and Management of
dustry.                                                         Ships' Ballast Water.
The emission-free ship, E/S Orcelle
                                                                When accidents occur at sea there is a poten-
Under the 2005 World Fair, Wallenius Wilhelmsen                 tial for the release of oil. Norway has already
was the centre of great attention about the 100 per-
cent emission-free E/S Orcelle. The concept is                  introduced comprehensive preventive sea-
based on new materials, new design, wind, and                   safety measures in our coastal waters through
solar power. The ship, which is powered by solar                the establishment and operation of the mari-
energy and wind & wave energy, can be a reality
within 20 years.                                                time infrastructure and services, and estab-
                                                                lished a state-organised oil pollution contin-
                                                                gency system for the prevention or limitation
                                                                of the negative consequences of incidents and
                                                                accidents at sea.
                                                                Key accident preventive measures in sea
                                                                transport at authority level are the monitoring
                                                                of ships traffic, the separation of traffic, the
                                                                piloting service and navigational aids.


                                      The Government's maritime strategy
                                                       - 25 -
In addition to the above, the Norwegian au-                        2.6 Emissions from shipbuilding
thorities are active in extensive interna-                         Shipping will not be an environmentally
tional co-operative efforts to improve                             friendly form of transport if the building of
safety at sea.                                                     ships is not also environmentally friendly. The
                                                                   Norwegian Pollution Control Authority (SFT)
The International Convention for the Control and                   – and the Regional Commissioners inspected
Management of Ships' Ballast Water (the Ballast                    84 shipyards, offshore yards and mechanical
water Convention).                                                 workshops for emissions in the autumn of
                                                                   2006.
In 2004 IMO adopted a new convention for the
control and management of ship’s ballast water
and sediments from ships.
                                                                   The inspections revealed that far too many
                                                                   have poor control over emissions to sea, and
Norway ratified the Convention on March 29th 2007,                 that 80 of 84 yards were in breach of the pollu-
and work is underway on new regulations governing                  tion regulations.
the handling of ballast water. The Convention stipu-
lates that in an intermediate phase ballast water shall
preferably be replaced in open seas (in waters of                  Many of the yards had poor handling routines
more than 200 metres depth and 200 nautical miles                  for hazardous waste and lacked proper envi-
and in all cases 50 nautical miles from land/200                   ronmental documentation. In addition the
metres depth). Standards for the cleansing of ballast
water will be introduced during period from 2009 to                inspections revealed serious deficiencies in
2016 dependent on the vessel’s size and building                   the Internal Control routines in many ship-
year. The Convention has not yet come into force,                  yards.
and the diffusion of ballast water will therefore con-
tinue to be a challenge up to 2020.
                                                                   Inspections have continued in 2007, and the
Norwegian Oceansaver has developed a concept for                   pollution authorities are now working on
the cleansing of ballast water. All technology to be
used aboard vessels shall be certified. Prior to certi-            more stringent regulations for shipyards.
fication can be awarded, thorough tests shall be                   Amongst the measures being assessed is the
carried out in accordance with IMO specifications.                 introduction of specific standards for the han-
The Norwegian Institute for Water Research,
(NIVA), has prepared a dedicated procedure with                    dling of materials that have been removed
dedicated laboratories and cultivation systems to                  from hulls.
carry out this demanding test.
                                                                   The situation regarding the seabed at ap-
The working life of a ship is dependent on                         proximately 100-yard areas will also be inves-
good maintenance to avoid amongst other                            tigated by the close of 2008. This includes
things corrosion and the degeneration of in-                       areas in both active and closed shipyards. The
herent hull strength. The development of                           work is part of a national plan to clean up pol-
good surface coating treatments for hull pro-                      luted seabeds. By 2010 the condition of the
tection that while affording protection do not                     seabed at the locations with highest priority
leach pollutants is a challenge. Norwegian                         shall have been investigated, and measures
manufacturers are world leaders in anti-                           required to rectify pollution shall have been
fouling ships solutions.                                           clarified.




                                     The Government's maritime strategy
                                                          - 26 -
The body responsible for implementing the                   Measures and initiatives
measures is the one is responsible under the                  •   Total funding for maritime research
regulations laid down in the Pollution Act, and                   and innovation of NOK 212 millions
the same body shall also bear the costs of the                    will be to a high degree prioritised for
inspections and measures.                                         the development and implementation
                                                                  of future-oriented environmentally
                                                                  friendly solutions.
2.7 Recycling of vessels
The IMO Environmental Committee (MEPC)                        •   The government will investigate and
is currently preparing and international man-                     report on the potential for stimulating
datorily regime for ships from “cradle to                         increased innovation and faster im-
grave”.                                                           plementation of environmentally
                                                                  friendly technologies by imposing
This means that the regulations apply to both                     stricter standards in connection with
the vessels themselves and the recycling                          state purchases of transport services
yards. The Convention is scheduled for com-                       by ship.
pletion in 2008-2009. Norway is leading the                   •   The government work for the adop-
work on development of the Convention.                            tion of a mandatory regime for the re-
                                                                  duction of greenhouse gasses for in-
The government’s aim is that the Convention                       ternational shipping.
will, to the highest degree possible, contribute
to resolving the problems associated with                     •   The government will actively contrib-
risks and damage to the working environ-                          ute to the further development of in-
ment and external environment in connection                       dexing tools and other tools both na-
with ship- recycling, while at the same time                      tionally and within the IMO to reduce
being sufficiently attractive to ensure that the                  the emission of greenhouse gasses.
major recycling nations and flag states ratify                •   The government will, in co-operation
the Convention.                                                   with the industry, develop a system
                                                                  where each individual vessel has an
                                                                  overview of its emissions combined
                                                                  with reporting to the relevant authori-
                                                                  ties.
                                                              •   The government will work to achieve
                                                                  concrete reductions in emissions
                                                                  through the IMO of NOx, through the
                                                                  introduction of standards for older en-
                                                                  gines, and the introduction of stricter
                                                                  standards for new engines with up to
                                                                  40-50 percent lower emissions than
                                                                  the current standards.




                               The Government's maritime strategy
                                                   - 27 -
•   The government will work through                    •   The government will work for the in-
    the IMO for the phasing out of the use                  clusion of international shipping in fu-
    of heavy oils as fuel on board ships.                   ture climate agreements.
•   The government will, through its
    work with the IMO be a prime motor
    in the work of developing a new con-
    vention that ensures the defensible
    recycling of vessels.
•   The government will work through
    the IMO to establish unified criteria
    for an international environmental dif-
    ferentiation system in IMO.
•   The government will update the regu-
    lations on environmental differentia-
    tion for among things to include
    greenhouse gasses.
•   The government will investigate and
    present an overview of all fees, tithes,
    levies, taxes and so forth in shipping,
    in comparison to other forms of trans-
    port, to contribute to the transfer of
    goods from road to sea transport.
•   The government will improve the dis-
    tribution network for gas, for among
    other reasons making preparations for
    the introduction of gas-powered fer-
    ries.
•   The government will prepare national
    regulations for the handling of ballast
    water that is in accordance with the In-
    ternational Convention for the Control
    and Management of Ships' Ballast
    Water.
•   The government will, in a proposal for
    a new investment fund, prioritise
    among other things the maritime sec-
    tor and place special emphasis on en-
    vironmental initiatives.




                            The Government's maritime strategy
                                               - 28 -
                                  3. Maritime Expertise




                                     Photo: Simulator Center at Ålesund University College



  The government’s aim is that Norway shall be the world leader in maritime
                                 expertise



3.1 Demand for expertise
                                                                The need for highly qualified personnel applies
Expertise is a vital element in the development
                                                                firstly to the recruitment of graduate engi-
of the maritime industry’s competitiveness and
                                                                neers, economists, lawyers, and other candi-
ability to create wealth. Growth in the global
                                                                dates with professional qualifications in mari-
economy and development in the offshore
                                                                time subjects. It is presumed that there is no
sector have provided good times for the mari-
                                                                lack of candidates for positions that require
time industry, and not least an increase in re-
                                                                higher educational qualifications in economy
cruitment. The need for labour will increase in
                                                                or law.
the years ahead. It will thus be necessary to
attract labour through increased recruitment
                                                                In addition to higher education qualifications, a
both from the Norwegian educational system
                                                                number of activities require maritime certifi-
and from abroad. The goals set out for the
                                                                cates, and many companies are seeking em-
Norwegian maritime industry impose de-
                                                                ployees with such qualifications.
mands on education, the development of ex-
pertise and recruitment. These are decisive
                                                                As is the case with a number of other branches
factors in maintaining and developing our abil-
                                                                in the Norwegian industry, the maritime indus-
ity to generate quality and innovation in the
                                                                try is affected by the lack of engineers, gradu-
Norwegian maritime industry. The industry
                                                                ate engineers and candidates with techni-
and the educational system must co-operate in
                                                                cal/scientific educational backgrounds. The
order to meet future need for expertise.
                                                                government’s emphasis on science subjects
                                                                will thus also be to the advantage of maritime
The government wants to see increased efforts
                                                                industry, and the numbers of applicants seek-
in the development of maritime expertise and
                                                                ing education in the sciences has increased
has therefore allocated additional funding of
                                                                since the science subjects strategy was
just under NOK 40 millions.
                                                                launched in 2006.

                               The Government's maritime strategy
                                                      - 29 -
An important measure in meeting the chal-                                   The government wishes to contribute with
lenges posed by the demand for expertise in                                 scholarship schemes designed to recruit for-
maritime industry is the Foundation Norwe-                                  eign students to maritime education, and is
gian Maritime Expertise (The Expertise                                      allocating NOK 2 millions for this purpose.
Fund). The establishment of the fund in 2003
has resulted in an increase in the number of                                The Norwegian maritime industry is a truly
trainee positions at sea, see box.                                          global business and recruits much of its labour
                                                                            force outside Norway. This applies first and
The Foundation Norwegian Maritime Expertise                                 foremost to seamen, but also to the shore-
In 2003 the Norwegian Parliament ruled that shipping com-                   based industry.
panies that are encompassed under the state aid arrangement
shall pay a fixed sum per employee per month to a fund that
will work for improvements in skills and expertise and re-                  The combination of a very high degree of in-
cruiting initiatives for Norwegian seafarers. The Foundation                ternational orientation and high level of exper-
Norwegian Maritime Expertise has been awarded the sole                      tise makes it important to adapt conditions for
right to collect and administer these monies. The Founda-
tion’s Board deal with and assess all applications received in              the maritime industry that contributes to in-
accordance with the Foundation’s stated aims.                               creased the professional mobility.
All shipping companies that receive state aid must have an
average of two apprenticeship places per vessel. Further, a                 The industry is dependent on that Norwegian
sum of NOK 500 per employee per month is paid to the                        personnel and expertise can be utilised outside
Foundation. In 2006 the foundation collected approximately                  Norway, and that foreign personnel can be
NOK 47 millions. The Foundation’s funds are used mainly
as grants to shipping companies that have trainee positions                 engaged to work in Norway without this result-
(apprentices, cadets and junior officers), accounting for                   ing in major administrative consequences.
approximately NOK 37.6 millions. This is an increase of
NOK 3 millions compared to 2005.
                                                                            3.2 Recruitment
Further, the Foundation prioritised roughly NOK 8.3 mil-
lions in grants to a number of recruiting and training projects,            It is difficult to estimate the future demand for
HES-measures etc. Shipping companies with on board                          labour in the maritime industry. In its editorial
trainee positions have the right to a fixed grant sum per                   “The best maritime education in the world”
employee per month. Grants to trainee positions cover only
part of the costs the shipping companies incur in establishing              from April 2007, Mandagmorgen (Monday
such positions. The aim of the grants is to encourage ship-                 Morning, a weekly newsletter) recommended
ping companies to establish trainee positions. There has been               that the maritime industry should plan on the
a positive development in the number of trainee positions
during the time the Foundation has been awarding grants for                 basis of annual recruiting requirements to
such positions. During the second half of 2005, grants were                 companies engaged in maritime activities of at
given to 1 650 trainee positions. The number increased to 2                 least 5 000 persons.
000 by the close of 2006.

                                                                            In the long-term, a good national and interna-
The international work environment in the
                                                                            tional reputation is the most important factor in
maritime industry is not sufficiently reflected in
                                                                            successful recruitment. This is the responsibil-
the educational system. The quality of mari-
                                                                            ity of the industry. Shipping has traditionally
time education in Norway should be at a level
                                                                            enjoyed a high status in Norway compared to
were we can attract foreign students and re-
                                                                            many other countries. The present situation is
searchers.
                                                                            that the maritime industry is not attractive



                                           The Government's maritime strategy
                                                                   - 30 -
among young people. It is therefore important               In 2005 the Norwegian maritime industry
to profile maritime industry in a manner that               launched a two-year training programme un-
makes it an exciting profession and attractive              der the auspices of the Norwegian Shipowner’s
career alternative for young people.                        Association called Maritime Trainee. The par-
                                                            ticipating companies cover a wide segment of
The recruitment campaign “Ikke for alle” (Not               the Norwegian maritime environment. Re-
for everyone) is a three-year campaign that has             sponse has been good both due to a large
the objective of attracting young people to take            number of maritime companies offering
up maritime studies. The project is supported               trainee positions and the large number of well-
by grants from the Foundation Norwegian                     qualified applicants.
Maritime Expertise.
                                                            The Ministry of Education and Research has
A number of shipping companies have issued                  launched an initiative plan for science subjects
guarantees of trainee positions on completion               with a particular emphasis on recruitment. A
of the studies. The combination of the The                  national recruitment campaign will be imple-
recruitment campaign and guarantees from                    mented in the spring of 2008 with the intention
shipping companies should be continued to                   of reaching young people who would not oth-
ensure continued recruitment and job security               erwise opt for science subjects, and in particu-
in the longer term.                                         lar female students. The recruitment campaign
                                                            will be co-financed by several paries amongst
The maritime industry must itself shoulder                  others: the Ministry of Education and Re-
much of the responsibility for the fact that re-            search, the Ministry of Trade and Industry and
cruitment to maritime activities both on shore              the Norwegian businesses and labour organi-
and in particular at sea has declined.                      sations. The new initiative plan for 2007/2008
                                                            is a follow up of the strategy “A joint effort for
The various segments of the industry have                   science subjects 2006-2009”. The Ministry of
themselves created uncertainty about the fu-                Education and Research will co-operate with
ture of Norwegian shipping through their one-               Norwegian industry, labour organisations, the
sided focus on the need for special framework               Norwegian Association of Local and Regional
conditions for shipping companies if they are               Authorities and the education sector. Good
to operate their activities from Norway with                role models, improved contact with industry
Norwegian seafarers. It is only recently that               and focussed recruiting initiatives can result in
the industry has taken active responsibility for            an increase in recruitment.
the recruiting of personnel through recruit-
ment initiatives and trainee-arrangements.                  The international work environment and the
                                                            pressing need for labour contributes to a situa-
Focus on recruitment and the increase in the                tion where the maritime industry should ex-
number of trainee positions has in all probabil-            pend greater effort in approaching prospective
ity had a beneficial effect. According to the               employees with minority backgrounds.
statistics for maritime education, there was an
increase in the number of applicants of 8.4 per-            The shipping company Höegh is a partner
cent from 2006 to 2007.                                     company in the Alarga programme. Alarga is a


                                The Government's maritime strategy
                                                   - 31 -
non-profit special interest organisation that has             such school. The school has invested in a new
the objective of creating space in private indus-             ship in order to modernise and update its train-
try for skilled, young people with two foreign                ing facilities. The government wishes to con-
parents of non-western origin. Active recruit-                tribute to the financing of the school’s new ship
ment of young people from minority back-                      with NOK 5 millions.
grounds provides an opportunity for shipping
companies to reach a larger section of the gen-               In addition to the standard educational sylla-
eral public.                                                  bus, post-qualifying and in-service training
                                                              courses are important elements of the total
                                                              maritime educational system. University col-
3.3 Maritime education                                        leges offer a number of courses, including
A number of workplaces demand and/or wish
                                                              simulator training, express launch courses,
to employ persons holding maritime certifi-
                                                              courses in passenger handling and contin-
cates. The fisheries for example compete with
                                                              gency handling, safety/security and contin-
the shipping industry for applicants with such
                                                              gency work, courses in dynamic positioning,
qualifications.
                                                              the use of electronic charts and helicopter
                                                              evacuation and so forth.
The government will examine the current
mustering system and will evaluate actual sail-
                                                              Four university colleges offer traditional mari-
ing time for the issuance of maritime certifi-
                                                              time education: Tromsø, Ålesund, Stord /
cates for non-convention imposed require-
                                                              Haugesund and Vestfold. In addition to these
ments. The question of simplifying the
                                                              are the 15 technical colleges that lie under the
mustering system for employees on vessels
                                                              authority of the county councils and 15 col-
has been discussed previously. For safety and
                                                              leges of further education that offer maritime
security reasons it is necessary to have control
                                                              education. The university colleges offering
of seafarers onboard vessels. There is however
                                                              maritime study programmes train students in
reason to evaluate at today’s system in order to
                                                              the operation of vessels and for shore-based
to see if this is being done in the most effective
                                                              activities. With the exception of the Vestfold
and efficient way.
                                                              University College the university colleges only
                                                              enrol students for the nautical programme. In
There are three main parties in the merchant
                                                              2006 there were only 15 students enrolled in
maritime educational system: institutions of
                                                              the ships engineer programme.
further education, technical colleges universi-
ties/university colleges.                                     In addition there is a number of engineering
                                                              educational opportunities offered that are rele-
In addition, the military operates education at               vant to the maritime sector, including both the
the Norwegian Naval Academy resulting in                      traditional shipping activities and the oil and
certification. The training ships are important               gas industry. Amongst others the NTNU (The
for recruiment to maritime professions, and                   Norwegian University of Science and Technol-
there is a long list of applicants to these.                  ogy) has a long traditions in offering education
                                                              in marine engineering.
The school training ship M/S GANN is one


                                 The Government's maritime strategy
                                                     - 32 -
The University College in Bergen also offers                 (STCW) Convention. The Navy invests in ex-
courses in marine engineering as well as a                   pertise and also offers excellent further -
newly established study programme in sub-sea                 education learning opportunities.
technology.
                                                             From the autumn of 2007 Befalsskolen for
Number of students/pupils – maritime                         Sjøforsvaret (BSS) – The Officer Training
education 2002-2007                                          Academy for the Defence Forces – will also
Year      Further       Technical Univer-                    offer diploma education in several new study
          education     college   sity col-
                                                             programmes of equal standard. The objective
                                  lege
                                                             of the new structure is to increase the numbers
2002      625           493       125
2003      631           494       135                        of officers available to the Naval Defence
2004      621           509       117                        Forces. The restructuring means that amongst
2005      569           461       98                         other things young people with technical edu-
2006      519           457       89                         cational backgrounds will be able to take up
                                                             studies at the BSS. The numbers of applicants
From the autumn of 2007 the University Col-                  for officer training has shown a considerable
lege in Vestfold is participating in a joint Mas-            increase in 2007 and the capacity has been
ters programme in Maritime Management, but                   fully utilised. The “Naval Defence Forces” new
as of today’s date there are no Norwegian insti-             educational services, together with the new
tutions offering a complete master programme                 divisional officers arrangements in the Defence
in management, economics and social sci-                     Forces, opens up for new avenues of co-
ences specifically aimed at the maritime indus-              operation between the maritime industry and
try. Handelshøyskolen BI (The Norwegian                      the Naval Defence Forces if the parties should
School of Business Management) offers elec-                  find that this serves their purpose.
tive subjects and courses for part time students
at Bachelor level. In the autumn of 2008 BI will             The lack of available courses coupled with a
commence specialisation in shipping at Bache-                lack of co-operation, insufficient numbers of
lor level in economics/administration. The                   teachers, and major challenges in relation to
government wishes to contribute to the estab-                the through-put of students indicate that nei-
lishment of programmes at master level in                    ther the structure nor the quality of the educa-
maritime management in Norway, and allocat-                  tional services offered are good enough.
ing funds for the development of such studies.
                                                             The situation for maritime education and the
In addition to the civilian educational system,              estimated requirements for future workforces
the Norwegian Navy offers education leading                  indicate that one must focus on quality and co-
to diploma qualifications at the Norwegian Na-               operation between the educational institutions.
val Academy. This is both a military oriented                The government will investigate and report on
and maritime education. To enable candidates                 how the quality and future structure of mari-
from the Navy to receive ‘civilian’ diplomas, the            time education can be improved with the aim
studies must adhere to the minimum required                  of attracting more students/pupils to enrol in
standards laid down in the Standards of the                  and complete this branch of education.
Training, Certification & Watchkeeping


                                The Government's maritime strategy
                                                    - 33 -
The results of this work are expected to be                   provided with a sound basis for a future career
available in January 2008.                                    in shipping.

The demand for new recruits also applies to
                                                               Wilhelmsen’s endowment professorship.
teachers in maritime education. The govern-
                                                               Torger Reve is Professor in strategy and international
ment believes there is a need to implement a                   competitiveness at Handelshøyskolen BI. Reve holds
survey of the requirement for recruiting teach-                Skibsreder Tom Wilhelmsen’s Foundation’s endow-
ers to maritime education. In addition to the                  ment professorship, and leads a newly established
                                                               research centre for maritime industries at BI. The
recruitment of teachers, it is vital that teachers             centre has the academic responsibility for research
are given the opportunity to update their skills               and education in shipping and maritime industries,
and knowledge.                                                 and will concentrate in particular on the industries
                                                               competitiveness in the international arena. Tom Wil-
                                                               helmsen’s foundation contributes NOK 6 millions to
As a step in improving skills and expertise                    basic research projects related to maritime industries
amongst teachers, the government will provide                  at the Centre for Maritime Competitiveness at Han-
                                                               delshøyskolen BI. The endowment professorship is
additional funds for initiatives designed to raise             financed for a period of 5 years from August 1st 2006
the professional skills and expertise of educa-                to July 31st 2011.
tors in maritime education.
                                                              In order to safeguard that the infrastructure in
Increased use of Professor II and Instructor II               maritime schools and colleges is updated, the
posts will be a good supplement and will pro-                 government is allocating NOK 10 millions to
vide an increase in professional expertise                    school equipment. The government will revert
within the field of maritime education. Profes-               with regard to application criteria for funding.
sor II positions are a co-operation between
maritime industry and universities/university                 It is claimed that the dropout rate is a problem
colleges. Similar arrangements should also be                 for maritime education. In order to sort out this
suitable for introduction in technical colleges               problem, one is currently evaluating the re-
and the institutions of further education. There              organisation of the syllabus so that students
are currently no Instructor II positions, but this            are given diploma studies and simulator train-
could be a good solution for co-operation be-                 ing at an earlier stage in the studies, which it is
tween the maritime industry and education                     believed will be a motivating factor.
institutions. The government will contribute
with funds to such positions in maritime edu-                 Further, emphasis will be placed on co-
cation.                                                       operation with ship-owners so that students
                                                              can work for periods in the maritime industry
The industry currently finances one professor-                in order to improve their motivation to con-
ship at the BI, see box. The industry is evaluat-             tinue the studies.
ing whether one can collectively finance more
professorships at for example the BI, NHH and                 The government has constituted a public com-
NTNU.                                                         mittee that will evaluate how technical and
                                                              professional training can be best equipped to
Technical maritime school equipment is essen-                 meet the future challenges. The committee will
tial in order to secure the students are


                                 The Government's maritime strategy
                                                     - 34 -
hand in its report on September 1st 2008. This              These studies are now co-located and there is
review will also be of importance to the mari-              now a common syllabus. The diplomas will be
time departments of technical schools.                      the responsibility of the Technical College,
                                                            while the Bachelor programmes, research and
There is relatively little research and develop-            the
ment work carried out with regard to engineer-              planned programmes will be under the aus-
ing and maritime educational environments.                  pices of the University College.
The government believes that the scope of
R&D work in maritime related education must                 The local social and business communities are
be increased.                                               deeply involved in the project. Norway’s Mari-
                                                            time Educational centre (NMU) was estab-
The industry itself must be an initiative taker             lished in 2004 by Vestfold County Council.
and co-operating partner in achieving this.                 The government wishes to provide support to
                                                            the establishment of NMU
3.4 Co-operation
Norwegian maritime education is spread out                  In addition to local co-operative initiatives, the
nationwide. It is therefore a challenge to im-              government will assess whether there is a
prove the effectiveness and quality of the edu-             need for stronger co-operation at national level.
cation offered. There is also a need for better             The government is positive to the initiative
co-ordination of maritime education in Norway.              taken by the industry’s participants for a report
                                                            on a main centre for maritime expertise in a co-
There is local co-operation on certain aspects,             operation between the industry, the authorities
in particular further and continuing education,             and educational institutions.
teacher exchange, the use of simulators and so
forth. A number of companies have co-                       The industry is also looking at the possibility of
operative agreements with technical colleges,               establishing a centre of expertise with an edu-
and several companies have established mari-                cational programme that can attract both Nor-
time educational centres for courses, joint use             wegian and foreign students and with a strong
of equipment and so forth.                                  focus on research activities.

Even though improved co-operation is called                 Depending on what one is looking for in the
for, there are already a number of excellent                flora of maritime expertise in Norway, a centre
initiatives in place. There has been co-                    of expertise could be situated at a number of
operation for several years between a number                locations in the country. One solution may be
of participants in maritime education and re-               to appoint a single educational institution as
search in Vestfold, from further education level            the key-point with responsibility for co-
to university college level. From the autumn of             ordinating the academic element, strategic
2006 the University College in Vestfold, the                development and marketing.
Technical College in Vestfold and Vestfold
Maritime Technical School have co-operated                   This centre of expertise model has the poten-
on co-ordinating diploma subjects.                          tial to become a highly competitive participant
                                                            in the international market place.


                                The Government's maritime strategy
                                                   - 35 -
Other countries have already successfully es-                            3.5 Foreign employees
tablished centres of this type; see the boxes on                         In the recent years, we have seen vigorous
the National Maritime College of Ireland and                             growth in the numbers of short-term immi-
“Lighthouse” in Gothenburg. The government                               grants from new EU countries.
will evaluate any initiative that may be put for-
ward by the industry concerning the develop-                             This has contributed to relieving the scarcity of
ment of a potential model in Norway.                                     labour, particularly in the building and con-
                                                                         struction industry and the shipbuilding indus-
”Lighthouse” in Gothenburg                                               try.

In Sweden Chalmers Technical College in Gothenburg and
                                                                         The requirement for language skills in both
the Swedish Shipowner’s Association have established a
centre for Nordic maritime expertise “Lighthouse” in Goth-               English and a Scandinavian language for per-
enburg.                                                                  sonnel who will advise and guide passengers
                                                                         in emergency situations on passenger vessels
The centre’s main activities are research and education. The
centre’s aim is to develop expertise for the future for the              in scheduled traffic calling at Norwegian ports
Swedish shipping industry. The goal for the period 2006-                 applies regardless of flag. In order to increase
2015 is that approximately 1 billion Swedish kroner will be
                                                                         the flexibility of the shipping companies, the
invested in maritime education, research and development.
The target is that 2 000 students will successfully sit for              government will assess whether it will be pos-
examinations from six studies in these fields, 100 Doctorate             sible to delete the requirement for a Scandina-
scholarships in a variety of study lines and 100 research and
                                                                         vian language without affecting the safety of
development projects with a focus on shipping. The vision
is to be the first choice for maritime research, development             both passengers and crew on board.
and education.
                                                                          The authorities wish to see that case process-
National Maritime College of Ireland (NMCI) in Cork                      ing time in connection with work permits and
                                                                         other statutory requirements for those who
In 2006 Ireland established The National Maritime College                wish to work in Norway are as short as possi-
of Ireland. The College is a co-operative project between
The Cork Institute of Technology and the Irish Navy. The                 ble, while at the same time cases concerning
College is partially privately financed. The public partners             applicants from abroad are dealt with in a thor-
are The Cork Institute of Technology and the Irish Navy                  ough and proper manner. For this reason the
Training College. The private partner is Focus Education
Ltd. The model makes it possible for the College’s admini-               Norwegian Directorate of Immigration (UDI)
stration and teachers to focus on that the students acquire              has received an additional allocation of NOK
the requisite skills and knowledge. Focus Education Ltd. is              2.5 millions in the national budget for 2007 as a
responsible for the day-to-day operation of the institution.
The College offers a wide range of educational training to               step in the recruitment of qualified staff to pri-
the maritime industry. With advanced simulators, technical               oritise the processing of more applications for
machinery rooms and a training unit for sea rescue, the                  work permits from this group of applicants.
College is an advanced centre of education for crew and
officers for both merchant and military vessels.
                                                                         The government and the UDI are also inter-
                                                                         ested in further efficiency measures so that
                                                                         processing times do not hinder private and
                                                                         public employers that need foreign labour.
                                                                         One will monitor developments and assess the
                                                                         need for more initiatives in this area.


                                          The Government's maritime strategy
                                                                - 36 -
The government will instigate a broad study of
case handling routines in immigration cases.               •   The government proposes to grant
The objective is to analyse and identify areas                 NOK 1.5 millions to the adaptation of
that may benefit from more efficient routines                  the Masters study in manage-
for resolving tasks, productivity gains and im-                ment/economy/ administration /social
proved services to users while maintaining a                   sciences in the maritime sector.
satisfactory quality of service.
                                                           •   The government has appointed a pub-
                                                               lic committee to assess how academic
                                                               and technical training best can be
Measures and initiatives                                       equipped to meet the challenges of the
   •   The government proposes that a grant                    future. The committee will submit its
       of an additional NOK 10 millions be                     report by September 1st 2008.
       made to purchase equipment for mari-
       time education.                                     •   The government will report on the
                                                               situation in Norwegian maritime educa-
   •   The government proposes to grant an                     tion, including recruiting, dropout per-
       additional NOK 8. 5 millions to meas-                   centages, the deficiency in numbers of
       ures designed to improve the level of                   teachers and teaching expertise. The
       expertise of teachers in maritime edu-                  report will be finalised in January 2008.
       cation.
                                                           •   The government will assess the possi-
   •   The government will support the estab-                  bility of simplifying the mustering sys-
       lishment of a Norwegian Maritime                        tem for seafarers and the reduction of
       Educational Centre (NMU). Funds will                    the actual sailing time requirement for
       be allocated by application.                            non-convention imposed requirements.
   •   The government proposes to support a                •   The government will extend the Exper-
       new school training ship for the mari-                  tise Fund. The government will invite
       time school GANN with NOK 5 mil-                        the Foundation’s Board to participate in
       lions.                                                  discussions concerning new levels, ar-
   •   The government proposes to grant                        rangements and the prioritising of
       NOK 5 millions to Professor                             funds.
       II/Instructor II positions in maritime              •   The government will promote effective
       education.                                              and efficient case handling routines
   •   The government will contribute with                     and contribute to the introduction of
       NOK 2 millions to scholarship                           revised immigration regulations that do
       schemes with the aim of increasing the                  not place unnecessary hinders in the
       number of foreign students enrolled in                  way of recruiting foreign labour.
       maritime education.




                               The Government's maritime strategy
                                                  - 37 -
                    4. Maritime research and innovation




                                              Photo: Marintek



The government’s aim is that Norway shall be the world leader in maritime
                         research and innovation


4.1 Innovation and expertise                               Some innovations are typically characterized
The government will contribute to Norwe-                   by improved efficiency or minor improve-
gian maritime industry becoming the leading                ments, while others are more radical, for
supplier of innovative and environmentally                 example the introduction of novel technical
friendly solutions for the future. Grants and              solutions.
funding allocations to maritime research and
innovation are therefore being increased                   Surveys show that extensive co-operation
from the current level of NOK 152 millions to              between demanding customers (shipping
NOK 212 millions in 2008. In a dialogue with               companies) and manufacturers contribute to
the industry, the government has identified                innovation. In the maritime industry, this
the environment, demanding environmen-                     kind of co-operation is vital in ensuring con-
tally friendly maritime operations and ad-                 tinued innovation, particularly between con-
vanced transport and logistics as new areas                sultants, equipment manufacturers, classifi-
of development for the maritime funds in the               cation companies, shipyards and workshops,
Research Council of Norway and Innovation                  finance institutions, competitors, research
Norway.                                                    institutions, business associations and uni-
                                                           versities.
The basis for profitability in Norwegian mari-
time industry lies in the ability to offer com-            Both general framework conditions, such as
petitive goods and services. Norwegian mari-               taxation and environmental regulations, and
time industry has upheld its competitive                   selective tools have an affect on the research
edge in international markets by demonstrat-               and innovation activities of enterprises.
ing the ability to change and innovate.




                              The Government's maritime strategy
                                                  - 38 -
The innovative ability of maritime industry is            research and innovation. The EU opened up
also influenced to a high degree by the en-               for among other things, an increase in gov-
terprises’ own priorities. A number of means              ernment grants and support to maritime in-
are employed in the maritime industry to                  novation, and several European countries
promote R&D and innovation. Some means                    introduced grant arrangements for activities
and arrangements support work in a number                 specifically targeting innovation.
of selected areas in research and innovation,
for example the Research Council’s pro-                   In Norway the scheme Maritime Develop-
gramme Maroff and Innovation Norway’s                     ment was established in 2006 under the aus-
scheme Maritime Development.                              pices of Innovation Norway. This was in ad-
                                                          dition to the already established scheme for
Others support long-term strategies to im-                grants and support to maritime research and
prove levels of expertise, diffusion of knowl-            development, Maroff, administered by the
edge and research infrastructure, such as for             Research Council of Norway.
example The Norwegian Centre of Excel-
lence SFF – CESOS and Norwegian Centres                   The EU also commenced work on the tech-
of Expertise NCE Maritime. In addition to                 nology platform Waterborne, a project in
means aimed specifically at maritime indus-               which Norway is an active participant. The
try, the industry also exploits a number of               maritime sector is one of the few sectors
non-segment specific instruments, for exam-               where authorities have elected to maintain
ple “Skattefunn”, research and development                dedicated sector-oriented research pro-
contracts and the “Brukerstyrt Innovasjon-                grammes.
sarena” (User-Driven Innovation Arena)
(BIA). The work of establishing a co-                     Government grants to maritime research
operative arena between the maritime indus-               and innovation have increased considerably
try and the authorities resulted in Marut.                during recent years.
This initiative was implemented in part to
counter the EU’s strategic commitment to its              The government is now extending and in-
shipbuilding industry, Leadership 2015.                   creasing its efforts by NOK 60 millions while
                                                          expecting the industries own investments in
In order to achieve improvements in the co-               the area to show a generous increase. Even
ordination of the research and innovation                 though maritime industry in Norway scores
effort, Marut is now well established as a co-            high on innovative ability, it appears to be the
operative arena between maritime industry,                case that maritime industries in our compet-
the implementation apparatus and authori-                 ing European neighbour countries invest
ties. Marut will continue to play an important            more resources in research and develop-
role in the realisation of Norway’s objectives            ment than the Norwegian industry.
in the area of maritime research and innova-
tion.                                                     Given increased international competition
                                                          and the major challenges associated with the
Through Leadership 2015, the EU has fo-                   ability to adapt to change and develop sus-
cused on eight areas, hereundermaritime                   tainable maritime industries, the Norwegian


                              The Government's maritime strategy
                                                 - 39 -
maritime industry has good reasons to place                     It is therefore crucial that ship-owners con-
more emphasis on research and innovation                        sistently and to the highest possible degree
in the years ahead.                                             transform the Norwegian Shipowners Asso-
                                                                ciation’s vision of zero emissions to sea and
The shipping companies role as demanding                        air into practical action when purchasing new
customers in relation to the shipyards and                      vessels and equipment.
equipment manufacturers provides them
with the opportunity to exert pressure for                      A few progressive ship-owners have made
innovation throughout the value chain.                          research and innovation a key strategic prior-
                                                                ity. This commitment should strongly en-
                                                                courage and inspire other shipping compa-
                                                                nies.



        Selected grants aimed at R&D and innovation in maritime industry,
                            2005-2008 (million kroner)

Grants                                         Administrator           2005 2006 2007 2008
Maritime development                           Innovation Norway            20   25   25
Maroff                                         The Research Council of 40   70   90   125
(hereunder infrastructure /equipment           Norway                                 (25)
to Marintek)
Marintek, basic grants                         The Research Council of 6                     6      7     7
                                               Norway
Strategic industry-focussed research – The Research Council of 11                            10     12    12***
marine technology                              Norway
Centre for Ships and Offshore Struc- The Research Council of 13                              13     13    13
tures*                                         Norway
(SFF-CESOS)
NCE Maritime**                                 Innovation                                    5      5     5
(Norwegian Centre of Expertise)                Norway, The Research
                                               Council of Norway, SIVA
Environmental projects in the mari- Innovation Norway                                                     25
time industry and development of the
commercial shipping fleet
Sum                                                                                 70       124    152   212
*Annual grants over five years from 2003, with the possibility of a five-year extension from 2008
** Annual grants over a ten-year period from 2006
***Estimated amount




                                  The Government's maritime strategy
                                                       - 40 -
In co-operation with the industry the gov-               infrastructure at Marintek, and therefore
ernment will work towards clearly defined                proposes to increase basic funding and
goals to ensure that maritime expertise, re-             grants for necessary equipment by NOK 25
search and innovation becomes an even                    millions.
greater competitive advantage. The govern-
ment will in particular emphasise the follow-            The government also wish to emphasise
ing innovation areas: Maritime environ-                  participation in international research and
mental     technology     and    demanding               knowledge development. Norwegian partici-
environmentally friendly maritime opera-                 pation in the EU’s 7th framework programme
tions, hereunder operations in the High                  will provide access to, and contribute to, in-
North regions.                                           ternational research and knowledge devel-
                                                         opment. The results of the EU’s 6th frame-
There is reason to believe that boosting re-             work programme show that Norwegian
search and innovation efforts in these areas             maritime industry asserts itself positively.
will require special means since private ac-
tors lack sufficient incentives to prioritise            4.2 Challenges and
them. The government will assume more                    opportunities
financial responsibility during a period re-
                                                         The Norwegian maritime industry is unique
gards these areas. The government will im-
                                                         in an international comparison because it is
pose stricter requirements for financing par-
                                                         uncommonly comprehensive. In Norway
ticipation from the industry in the area
                                                         one finds almost all segments of the interna-
advanced logistics and transport.
                                                         tional maritime value chain represented.

Another important prerequisite for intensify-
                                                         In addition to this, there are segments of the
ing research and innovation work in the
                                                         industry that are made up of specialised clus-
maritime industry is improved access to
                                                         ters that focus on maritime niche markets
world class advanced laboratories and scien-
                                                         and areas of technology, for example in the
tific equipment. Major investments have
                                                         offshore or fish farming sectors. The mutual
been made throughout the years in experi-
                                                         interdependence between these strategically
mental infrastructure in the research envi-
                                                         vital sectors in Norway has resulted in the
ronments at Marintek and NTNU in Trond-
                                                         development of complementary and special-
heim, and these are now internationally
                                                         ised skills and knowledge. This is a competi-
renowed research institutions.
                                                         tive advantage that can be further empow-
                                                         ered and developed.
There is however a need for considerable
upgrading and new investments if these in-
                                                         Since 2005 the maritime industry has en-
stitutions are to maintain their competitive-
                                                         joyed a period of vigorous growth, in part
ness and continue to offer Norwegian ship-
                                                         driven by the consistently high oil prices and
ping attractive research services.
                                                         high levels of activity in the offshore sector.
                                                         This has resulted in a demand for maritime
The government will upgrade              and
strengthen the maritime research


                             The Government's maritime strategy
                                                - 41 -
services and products in the groups of mari-                     the weather conditions in these areas, the
time industrial companies that serve the                         Norwegian maritime industry has managed
Norwegian and international oil and gas sec-                     to develop specialized expertise and competi-
tor. In addition to this, the sea freight market                 tive advantages in demanding maritime op-
has been driven forward by economic devel-                       erations in cold climates.
opment and vigorous growth in Asia, which
in turn has resulted in an increase in the de-                   The development of the oil and gas sector in
mand for ships and equipment.                                    the northern areas creates the demand for
                                                                 even more specialisation, expertise and tech-
Examples of research and innovation measures                     nology.

1. The Norwegian Centre of Expertise – Maritime
                                                                 The same applies to the development in fish
(NCE). The maritime environment in Møre is linked
to offshore shipping activities and consists of 170              farming that is increasingly focused on areas
companies, generates roughly NOK 25 billions in                  far out at sea. There are a number of chal-
turnover and provides direct employment for 13 000
                                                                 lenges in connection with maritime activities
citizens in the region. The value chain from design
to ship-owner is located with its main base within a             in Arctic regions, for example climatic condi-
relatively small geographic area, a fact that aids               tions such as ice and extreme cold. Cold cli-
quick and effective co-operation and co-ordination.
                                                                 mate operations also give birth to a new set
The region has two university colleges, and supplies
candidates to the industry. The objective of award-              of safety requirements that have to be in-
ing selected environments NCE status is to contrib-              cluded in contingency plans and the training
ute to an increase in wealth creation by promoting
                                                                 of personnel who will participate in emer-
and improving co-operation-based innovative and
internationalisation processes in local environments             gency situations. The Arctic is particularly
with clearly defined ambitions and a high potential              sensitive to pollution, and maritime opera-
for further growth.
                                                                 tions must therefore contribute to sustain-
2. The SFF (Norwegian Centre of Excellence) –                    able development and resourse manage-
CESOS (Centre for Ships and Offshore Structures).                ment in the northern areas.
 The aim of the SFF – CESOS at NTNU is to estab-
lish a world-leading centre that will develop the
basic knowledge necessary for the design and opera-              Increased exploitation of oil and gas and a
tion of tomorrow’s ships and maritime structures.                steady increase in the global demand for
This knowledge is necessary for the further devel-               transport is a global threat to the environ-
opment and design of safe, cost-effective and envi-
ronmentally friendly technological solutions for                 ment in the form of emissions to sea and air.
maritime operations. The intention of the SFF ar-                It is of vital importance to Norway that our
rangement is to stimulate Norwegian research envi-               sea and coastal environment is clean and
ronments to establish centres dedicated to long-term,
basic research at a high international level, and the            pollution free.
aim is to improve the quality of Norwegian research.
                                                                 The fishery sector, the fish farming sector
                                                                 and the tourist industry are totally dependent
Some of Norway’s most important natural                          on this. Accidental spillages and similar inci-
resources are found either in or under the                       dents in our region could have extremely
sea. The Norwegian maritime industry is                          serious consequences for our coastal and
mainly focused on oil and gas, the fisheries                     sea-based activities.
and fish farming. Due to the geographic loca-
tion of Norwegian sea and ocean areas and

                                   The Government's maritime strategy
                                                        - 42 -
At the same time increased environmental                   The government will therefore continue to
awareness and international environmental                  support the development of NOx reducing
conventions have resulted in an increase in                technologies. One example of how the state
the demand for environmentally friendly                    –funded participants The Research Council
solutions. Given Norway’s international envi-              of Norway, Innovation Norway and private
ronmental commitments, and the growing                     participants can work jointly in contributing
market for maritime environmental technol-                 to resolving environmental challenges and
ogy, one of the main challenges facing the                 stimulating new industrial ventures is the
maritime industry is to develop technology                 previously mentioned FellowShip Project.
that can reduce emissions in all segments of
maritime industry activities.                              FellowShip (Fuel Cell Low Emission Ship)

With its basis in Norwegian technology and                 FellowShip started in 2003 with the objective of
                                                           developing commercially viable fuel cell systems for
expertise, the industry has every chance to                use in the shipping and offshore sectors. The project
become a world leader in environmentally                   is based on cutting edge fuel cell technology in com-
friendly maritime solutions. It is also a chal-            bination with a wide range of Norwegian profes-
                                                           sional expertise that represents a continuous value
lenge to secure an efficient and environmen-               chain in maritime industry. The main partners in the
tally friendly commercial shipping fleet                   project are the classification company Det Norske
adapted to future needs and environmental                  Veritas, the shipping company Eidesvik Offshore,
                                                           the ships architects group Vik-Sandvik, the fuel cell
standards.                                                 integrator Wärtsilä Ship Power Automation, together
                                                           with the German company MTU as sub-supplier of
Norway has considerable influence in the                   the fuel cells.
IMO, which stipulates safety and environ-                  FellowShip was made possible through the support
mental standards for shipping. In order to                 of the Research Council of Norway’s programme
improve the industry’s competitiveness in                  Maroff of NOK 34 millions, and NOK 4 millions
                                                           from the “Renergi” programme. Innovation Nor-
the international market place, the govern-                way’s Maritime Development supports the second
ment proposes to co-ordinate research and                  phase of the project with NOK 5 millions. The pro-
innovation and development of the interna-                 gramme is scheduled for completion by the close of
                                                           2008.The technology that is developed through Fel-
tional regulations through a closer and more               lowShip results in zero emissions of NOx, SOx, and
obligatory mutual reporting and dialogue                   particles, and a halving of CO2 emissions compared
between the industry through Marut and the                 to conventional diesel engine technology. In the long
                                                           term this technology can contribute greatly to Nor-
authorities through the Forum for environ-                 way’s efforts to meet its commitments in relation to
mentally friendly shipping.                                the future environmental agreements that are ex-
                                                           pected to result in the wake of the Gothenburg Proto-
                                                           col and the Kyoto agreement.
The government wishes to reduce emissions
of greenhouse gasses and other emissions to
sea and air. This will in turn promote the
development of sustainable technology and
industry that might prove to be an ever-more
important competitive advantage in the fu-
ture.



                              The Government's maritime strategy
                                                  - 43 -
Measures and initiatives
  •   The total funding framework to mari-
      time research and innovation of NOK
      212 millions shall to a higher degree
      be prioritised towards the develop-
      ment and implementation of envi-
      ronmentally friendly solutions for the
      future.
  •   Through the Research Council of
      Norway and Innovation Norway the
      government will increase support for
      maritime research and innovation.
      The following maritime research and
      innovation areas will be given high
      priority:    environmentally friendly
      maritime technology, demanding en-
      vironmentally friendly maritime op-
      erations, hereunder operations in the
      northern areas and advanced logis-
      tics and transport. Support to projects
      in the two first-mentioned areas will
      be increased by NOK 5 millions
      each.
  •   The government will upgrade and vi-
      talise the infrastructure for maritime
      research at Marintek. The govern-
      ment proposes to increase basic fund-
      ing and grants for necessary equip-
      ment by NOK 25 millions next year.
  •   The government aims to increase the
      influence of the authorities in the co-
      ordination of international environ-
      mental regulation in IMO and tar-
      geted research and innovations ef-
      forts.
  •   The government will continue to sup-
      port the development of NOX reduc-
      ing technologies under Maritime De-
      velopment in Innovation Norway and
      Maroff in the Research Council of
      Norway.

                            The Government's maritime strategy
                                                - 44 -
                                5. Short Sea Shipping




                                         Photo: Nordfjell, Nor Line




The government’s aim is that Norwegian short sea shipping shall be a more
environmentally friendly and competitive alternative to road transport so
              that more goods can be transported by sea

5.1 Short sea shipping
                                                            Shipping in itself is only to a small degree a
Short sea shipping is the transport of goods
                                                            door-to-door concept, and is therefore de-
or passengers by sea between ports in
                                                            pendent on efficient transfer facilities to other
Europe and between ports in bordering
                                                            modes of transport such as road and rail. The
countries. Short sea shipping competes to a
                                                            outbound cargo volume from Norway is five
large extent with other forms of transport
                                                            times that of the inbound volume.
such as road and rail.
                                                            This considerable imbalance in the volume
Norway has a long coastline, and a high per-
                                                            of import/export goods means that many
centage of commercial and industrial activi-
                                                            ships, in particular bulk carriers enter Nor-
ties are located along the coast. This has fa-
                                                            wegian waters with little or no cargo and
cilitated the role of shipping as an important
                                                            leave again with full cargo holds. In the case
national transport system. Sea freight is also
                                                            of container ships, the opposite is often true
the dominant for transport in the export and
                                                            they arrive in Norway fully loaded and leave
import of goods from and to Norway. In 2006
                                                            again without cargo.
roughly 70 percent of imports and 60 percent
of exports measured in tonnes was carried
                                                            The fleet currently serving Norwegian ex-
by ships. Domestic Norwegian transport is
                                                            porters and importers have a considerable
open to all ships regardless of flag, with the
                                                            spare capacity. The domestic fleet has a load
exception of vessels registered in NIS. For-
                                                            factor of 55 percent and outbound traffic is
eign companies handle 40 percent of the
                                                            closer to 70 percent.
Norwegian import and export market.




                              The Government's maritime strategy
                                                  - 45 -
The ports are the hubs of transport by sea.               European Commission and the individual
Efficient ports and good links between the                participating countries.
ports and the land-based transport network
are therefore key factors in increasing the               The EU’s primary transport policy is laid
competitiveness of sea transport services.                down in the white paper “European Trans-
                                                          port Policy for 2010 : Time to decide” pub-
According to Statistics Norway (the State’s               lished in 2001 and the revision of the same
statistics office), the average transport dis-            document, “Keep Europe moving – Sustain-
tance for land transport in 2004 was just less            able mobility for our continent” published in
than 59 kilometres. The average distance at               2006. In order achieve an increase in the
sea was 189 kilometres.                                   transfer of goods from road to other modes
                                                          of transport, the white paper proposes a pol-
Despite this, a higher volume of goods is                 icy in which measures are implemented that
transported by road than by sea. In 2004 85               combine the use of public levies, the revitali-
million tonnes were transported by ship,                  sation of alternative means of transport to
while 254 million tonnes were transported by              road transport and dedicated investments.
road.
                                                          One of the proposed measures is the further
                                                          development of the Motorways of the Sea
5.2 The EU and short sea
                                                          concept, i.e. regular and frequent transport
shipping                                                  routes that can compete with the flexibility
Norway participates actively in the EU’s                  offered by road transport. Motorways of the
work of promoting short sea shipping. The                 Seas shall be an integrated part of door-to-
Ministry of Trade and Industry, The Ministry              door transport chains, and the links between
of Fisheries and Coastal Affairs and the Min-             sea and shore-based infrastructure have
istry of Transport & Communications have                  therefore been given high priority. Norwe-
established a Norwegian centre for short sea              gian authorities are active participants in the
shipping (Shortsea Promotion Centre Nor-                  work of developing the Motorways of the Sea
way – SPC-N). SPC- N is part of a European                concept in the Baltic Sea and North Sea.
network of such centres (The European
Shortsea Network – ESN). The main objec-                  Another initiative is the Marco Polo Pro-
tive of the centre is promoting sea transport             gramme in which EEA countries also par-
in order to transfer transport from road to               ticipate. The programme commenced in
sea.                                                      2003 and will continue until 2013. The main
                                                          aim is to promote a more environmentally
In 1999 The European Commission took the                  friendly transport system for goods.
initiative to preparing an overview of bottle-
necks in short sea shipping in Europe. Work               The programme offers financial support to
done on the basis of this analysis has re-                the establishment of new sustainable trans-
sulted in the removal of many of the identi-              port solutions that can contribute to the
fied bottlenecks. This work is ongoing, in                transfer of goods from road to sea, rail and
part under the auspices of the ESN, The                   inland waterways.


                              The Government's maritime strategy
                                                 - 46 -
The programme applies to international                   for political priorities in the transport field as
goods transport and premises co-operation                a whole, the effective use of political meas-
between a minimum of two member coun-                    ures and how to strengthen the interplay
tries or between enterprises in at least one             between the various modes of transport in
EU country and a third country, for example              order to contribute to efficient, safe and envi-
an EFTA/EEA country. The project Shortsea                ronmentally friendly transport solutions. In
XML will develop a standard message for                  preparing the National Transport Plan
communication between participants in                    (NTP) 2010 – 2019 the government will base
European short sea shipping. The Marco                   its work on the overriding objective for our
Polo- programme has provided funding for                 national transport which is:
this project and the work is led from Norway.
The government will continue the Norwe-                  “To offer an efficient, accessible, safe and
gian participation in the EU’s Marco-Polo                environmentally friendly transport system
programme through Marco Polo II.                         that meets society’s needs for transport and
                                                         encourages regional development.”
Norway will further participate in the Euro-
pean Interregional Co-operation (Interreg).              The overriding objective is further defined in
In the trans-national programmes in which                four main goals:
Norway participates, i.e. Interreg IVB North-                - Improved access and reduced costs
ern Periphery, Interreg IVB The North Sea,                      associated with distance to improve
Interreg IVB The Baltic Sea, which cover the                    competitiveness in trade and industry
areas the Nordic Peninsula, North Sea and                       and to contribute to the maintenance
Baltic Sea, the maritime aspects have a spe-                    of the main features of national set-
cial priority, with focus on among other                        tlement patterns.
things innovation, the environment and                       - The transport policy shall be based
transport.                                                      on a vision that no accidents shall oc-
                                                                cur in the transport sector that are
On the basis of experiences gained from                         the cause of death or injury.
projects such as the Northern Maritime Cor-                  - The transport policy shall contribute
ridor, it will be possible to use these pro-                    to reducing the negative impact of
grammes to achieve stated objectives of the                     transport on the environment, as well
Norwegian maritime policy.                                      as contributing to the attainment of
                                                                Norway’s national objectives and in-
5.3 National transport policy                                   ternational obligations regarding en-
Norway’s national transport policy is ex-                       vironmental matters.
pressed in the white paper on the National                   - The transport system shall have a
Transport Plan (NTP). The government                            universal framework.
aims to present a new white paper for the
period 2010-2019 at the change of year                   In accordance with the above, the coming
2008/2009. The plan will lay down the basis              NTP will include measures and initiatives
                                                         designed to stimulate and encourage the
                                                         optimising of the individual modes of trans-
                                                         port

                             The Government's maritime strategy
                                                - 47 -
to ensure that the advantages of each mode                 The oil and gas industry is a large and de-
are exploited in the best possible way.                    manding customer for Norwegian shipping
                                                           companies, shipyards and subsuppliers. Ma-
Emphasis will be placed on the fact that the               jor investments have already been made in
transfer of goods from road to sea and rail is             the Snøhvit Field, where the LNG carrier
not an objective in itself, but a strategy to              fleet plays a key role.
assist in achieving the overriding objective of
an efficient, accessible and environmentally               The Norwegian maritime industry has de-
friendly transport system. As part of in this              veloped an expertise that will be of great
work, high priority is given to ensuring that              value in relation to the market for the recov-
there are good links between the transport                 ery of oil and gas in Northwest Russia. For
networks, which is a decisive factor if ship-              their part, the authorities have invested ma-
ping is to play a more prominent role in na-               jor resources into research and the following
tional and international transport.                        up of the Unified Administrative Plan for the
                                                           marine environment in the Barents Sea and
The Ministry of Fisheries and Coastal Affairs              the seas off Lofoten.
is working on a revision of the Harbours &
Fairways Act. The main objective is to estab-              Fish stocks and other renewable marine re-
lish a legal framework that contributes to the             sources have been the historical resource
development of ports as efficient logistical               base for the coastal populations. Proper man-
hubs and the sea transport as an efficient,                agement of these resources, business devel-
safe and environmentally friendly mode of                  opment in connection with sea farming and
transport. Questions relating to ownership                 aquaculture, and research into marine bio-
organisation and management of the ports                   prospecting can contribute to creating sus-
are key elements in the revision.                          tainable economic growth in the High North
                                                           regions. Maritime expertise and research
5.4 High North regions                                     will be a vital premise for the positive devel-
In its strategy for High North regions the                 opment of the marine resource basis in the
government has stated that the main objec-                 north. The challenge related to global cli-
tive of government policy in this field is to              mate change is perhaps best manifested in
create sustainable growth and development                  the Arctic region. The highly vulnerable Arc-
in the High North regions. The reasons for                 tic eco-system functions as a barometer of
this is the increasing level of international              the global situation for scientists engaged in
interest in Arctic oil and gas reserves and                climate research.
marine resources.
                                                           The melting of the polar ice has already con-
The challenges presented by global climate                 tributed to improved ease of access and freer
change and the potential for future transport              passage, especially in the summer months.
routes for both energy and shipping have                   This has awakened interest in the potential
contributed to this rise in interest.                      for new transport routes in the future, for
                                                           example the Northern Maritime Corridor
                                                           (NMC) and other Arctic fairways.


                              The Government's maritime strategy
                                                  - 48 -
Oil and gas deposits and new transport                              Governments High North Strategy stipulates
routes is a the potential for considerable                          that research and knowledge development
commercial activities for maritime industry                         relevant to the High North region shall be a
in the years ahead.                                                 point of focus. Further, environmental tech-
                                                                    nology developed for and in the High North
Environmental damage in due to pollution                            region shall be developed through increased
caused by emissions or shipping accidents                           R&D efforts.
can however have a massive impact on the
vulnerable Arctic eco-system.                                       The new priorities and the increase in fund-
                                                                    ing through the Research Council of Nor-
                                                                    way’s programme Maroff and Innovation
The Northern Maritime Corridor (NMC)
                                                                    Norway’s scheme Maritime Development
The Project Northern Maritime Corridor is a co-                     shall together contribute to the achievement
operation between the two Interreg IIIB programmes
                                                                    of these goals. At the same time, maritime
The North Sea and the Northern Periphery. During
the period 2002-2006 NMC has worked on improving
                                                                    innovation and the development of business
the potential for sea freight activities in the corridor            activities associated with demanding mari-
from the Mainland of Europe and Great Britain, along                time operations in the Northern Region will
the cost of Norway and to Northwest Russia. NMC is                  be accelerated due to the fact that the in-
a co-operation between 20 regions in nine countries,
                                                                    crease in funding will also be a factor in trig-
and participants are from both the public and private
sectors.
                                                                    gering the influx of private capital and in-
                                                                    vestments.
Rogaland County Council is responsible for the pro-
ject (lead partner) together with the Regional Council
for Northern Norway. In addition, there has been                    A revitalised and proactive research infra-
special emphasis on Northwest Russia administered                   structure creates the premises required for
by the Barents Secretariat. An interdepartmental co-                further acquisition of knowledge.
ordination group has been established at central level
consisting of OED, MD, SD, UD, NHD and FKD.                         The Norwegian authorities have high prior-
                                                                    ity on safety at sea in the High North regions.
It is therefore unequivocally clear that a pre-                     The establishment of a vessel traffic monitor-
requisite for the sustainable exploitation of                       ing service in Vardø January 2007 is an im-
this potential is major investment in safety                        portant instrument in this regard.
measures and the environment: With more
than 30 years of experience in exploration,                         The vessel traffic monitoring service in
development and operation on the Norwe-                             Vardø monitor maritime traffic, exchange
gian continental shelf, the Norwegian oil and                       information and interact with vessels. In or-
gas sector and the maritime industry have                           der to increase the safety standards at sea
together accumulated a wealth of valuable                           and minimizing the risk of acute pollution,
HES expertise in the field. Norwegian HES                           Norway introduced 1st of July 2007 a new
expertise and technology can also play an                           traffic separation scheme and recommended
important and central role for co-operation                         routes of the coast from Vardø to Røst.
with Russia in the Barents Region.




                                     The Government's maritime strategy
                                                           - 49 -
The routes are placed about 30 nautical miles             commencement of work on a Norwegian
offshore. The routing system applies to tank-             satellite for receiving AIS (Automatic Identi-
ers regardless size and to cargo ships of                 fication System) signals. The system enables
more than 5000 gross tonnages. The gov-                   real time overview of ships in Norwegian
ernment also established a state run tugboat              waters that are equipped with AIS transmit-
service for the stretch Vesterålen to Grense              ters. Funds will also be allocated for research
Jakobselv in 2003.                                        activities under the auspices of the Andøya
                                                          Rocket Launch Field, and to ESA related
The Ministry of Fisheries and Coastal Affairs             ground observation activities in the north.
has established a close co-operation with the
Russian authorities with regard to safety at              5.5 From road to sea
sea and oil pollution preparedness in the                 Shippers’ choice of mode of transport is de-
north. During the coming period work will                 cided mainly by price and the quality of ser-
be done on among other measures the estab-                vices offered. Sea freight is the dominant
lishment of a Norwegian-Russian vessel traf-              mode of transport for all freight connected to
fic monitoring- and information system for                Norway’s foreign trade. This is particularly
the Barents Sea.                                          true of the import and export of bulk prod-
                                                          ucts, but also applies to general cargo. In
The government is also positive to that the               domestic terms, it is only in the case of move-
University of Tromsø, together with the Shi-              ments of goods between West and North
powner’s Association of Norway and the                    Norway that sea freight has a significant vol-
Maritime Forum in Northern Norway have                    ume. Sea freight has almost 100 percent of all
established a study in maritime Arctic exper-             traffic between some of these distances.
tise (MAK). The aim is to develop and offer
shipping companies the expertise necessary                Approximately 75 percent of the transport of
for the safe operation and management of                  domestic general cargo is carried out over
vessels in the Northern Region.                           distances of between 100 and 600 kilometres,
                                                          but both sea, rail and road carriers carry out
Participation of the industry will ensure that            most of the domestic transport of general
the educational services offered are relevant,            cargo over distances of between 300 and 600
and will at the same time contribute to im-               kilometres. If more cargo are to be carried
proving the industry’s reputation.                        by ship, measures must be introduced to
                                                          promote inter-modal transport solutions.
Satellite communication, navigation and im-
ages for weather reporting, the monitoring of             This implies amongst other measures ex-
national boundaries, shipping, the fisheries              tending and improving the infrastructure to
and the environment, together with the as-                ensure efficient and effective correspondence
sertion of sovereignty are all important ele-             between ports, sea freight networks and land
ments in Northern Region Policy.                          based freight networks.

The grants for space-related activities in
2008 will include funds for the


                              The Government's maritime strategy
                                                 - 50 -
Color Line                                                         structure in the other segments of the trans-
The launch of Color Line’s new SuperSpeed concept                  port sector, and in relation to the overall lev-
in 2008 is an important example of innovation. With                ies and charges policy. A full review must
its large cargo capacity and short turn-round time in              therefore be implemented in connection with
ports, Color Line is extending the motorways on both
sides of the Skagerrak and shortens journey times by               review of the NTP.
a considerable margin. In 2006 Color Line trans-
ported more than 192 000 trailers between Norway
and the mainland of Europe, an increase of about 10                5.7 The Norwegian regional
percent compared to the previous year. Measured in                 shipping fleet
heavy vehicles this is equal to 23 percent of all heavy
                                                                   An efficient short sea shipping fleet is essen-
traffic over Svinesund in 2006.
                                                                   tial if short sea shipping is to be as a key ele-
                                                                   ment of an inter-modal transport service.
5.6 Fees and other public
charges                                                            Interaction and co-ordination between vari-
In the Soria Moria Declaration the govern-                         ous modes of transport demands full co-
ment stated that it would carry out a full as-                     operation at all levels and in all segments,
sessment of all dues and other public                              and this is of course absolutely vital if de-
charges on sea transport (gebyrer og avgifter                      manding customers are to have their re-
for sjøtransport) in order to establish a level                    quirements met. Several Norwegian ship-
playing field of competition between sea                           ping companies have a modern and efficient
transport and land-based transport .The gov-                       short sea shipping fleet. It is however also a
ernment will follow up this matter in the                          fact that much of the Norwegian short sea
NTP.                                                               shipping fleet has an high average age and
                                                                   are organised in small units. The average age
The Ministry of Fisheries and Coastal Affairs                      of ships in the segment of the fleet that are
is currently working on a review of The Nor-                       owned and/or operated by Norwegian are 23
wegian Coastal Administration’s charges.                           years.

The review will amongst other things look at                       The oldest vessels are in the categories dry
how the revenues from charges are catego-                          cargo vessels and bulk carriers.
rised in relation to the size of vessels and the
various categories/groups of vessels. The                          It is the smallest vessels that have the high-
review of the Coastal Administration’s                             est average age. Profitability in the short sea
charges will be completed prior to the review                      shipping fleet varies greatly. There is much
of the NTP.                                                        that indicates that that one of the advantages
                                                                   of having a large fleet is that the turnover per
There are a number of other levies and                             vessel is higher. The reason for this is that a
charges on carriage by sea that have an in-                        larger fleet allows for greater flexibility and it
fluence on the divergence of the various                           is easier to exploit the full potential of the
modes of transport and the transport sector                        fleet better. Renewals in the fleet happen
as such. Levies and charges on carriage by                         through purchase of older tonnage.
sea must be evaluated against the financing



                                   The Government's maritime strategy
                                                          - 51 -
Efficient and environmentally friendly short                 industry, utilise the existing       industry-
sea shipping is ensured by that vessels are                  oriented government schemes.
adapted to meet modern transport patterns
and requirements and not least that the high-                Three schemes operated under the auspices
volume cargo carrying capacity of the vessels                of Innovation Norway will be particularly
is utilised to the fullest possible extent in                applicable to the short sea shipping fleet: low
comparison to for example road transport                     risk loans, research and development con-
units. The larger the volume of goods carried                tracts, and maritime development. In addi-
on a route, the easier it is to consolidate ship-            tion the Skattefunn tax deduction scheme
ments, which in turn provides the basis for                  will be an option. Projects for which grants
more efficient and cost-effective transport                  are applied for must fulfil the requirements
solutions. Development along these lines                     imposed for enterprise and socio-economic
would no doubt disfavour a number of small                   profitability.
ship-owners with old vessels. Improved co-
operation between small shipping companies                   In 2008 the government will allocate NOK 25
should therefore be an objective.                            millions to Innovation Norway for the devel-
                                                             opment of the short sea shipping fleet and
The Ministry of Trade and Industry has initi-                environmental projects in maritime industry.
ated a study with the aim of obtaining a well-
founded basis on which to evaluate a number
of measures and initiatives designed to in-
crease wealth (verdiskapning) creation in,
and the modernisation of, Norwegian short
sea shipping.

The report resulting from the study will in-
clude an analysis of the services available
and services demanded in connection with
this segment of the shipping sector, and the
economic impact of this segment.

The report will identify the challenges that
are not resolved by the industry itself and
where it will be good economics that the
authorities contribute.

Proposals for concrete measures and initia-
tives will be included. The report will be final-
ised in 2007.

The short sea shipping fleet can, as is the
case with other branches of Norwegian


                                The Government's maritime strategy
                                                    - 52 -
Measures and initiatives
  •   The government will allocate NOK                    •   The government will pursue Nor-
      25 millions to Innovation Norway for                    way’s participation in the EU’s Marco
      environmental projects in maritime                      Polo-programme through Marco
      industry and the development of the                     Polo II. Norwegian authorities and
      short sea shipping fleet. A major part                  the transport industry will work to
      of the allocation will be earmarked for                 raise the awareness of the Marco
      the short sea shipping fleet.                           Polo- programme in the industry aim-
                                                              ing at an increased Norwegian par-
  •   The increase in research and innova-
                                                              ticipation in new projects financed
      tion funds of NOK 5 millions for re-
                                                              through this programme.
      quiring environmentally friendly
      maritime operations shall contribute                •   Norway will also continue to partici-
      to the development of technologies                      pate in the European Interregional
      for a safe and environmentally                          Co-operation (Interreg). The gov-
      friendly short sea shipping fleet in the                ernment will strive to propose pro-
      High North regions.                                     jects within the framework of these
                                                              programmes with a basis in the ob-
  •   The government has initiated a re-
                                                              jectives of Norwegian maritime pol-
      port on Norwegian short sea ship-
                                                              icy.
      ping. Based on the report’s findings,
      the government will evaluate the                    •   Norway will actively participate in the
      need for further measures and initia-                   EU’s work of promoting short sea
      tives for the industry.                                 shipping through amongst other
                                                              measures the Shortsea Promotion
  •   The Ministry of Fisheries and Coastal
                                                              Centre - Norway. Furthermore, Nor-
      Affairs is currently working on a re-
                                                              way will continue the work of remov-
      view of The Norwegian Coastal Ad-
                                                              ing bottlenecks for short sea shipping
      ministration’s charges. Among other
                                                              and the development of Motorways
      things the possibility of introducing
                                                              of the Sea.
      solutions that the fees and charges to
      a larger extent will be based on a cost
      principle will be considered.
  •   In connection with the National
      Transport Plan, the government will
      present an overview of all charges,
      levies and fees imposed on carriage
      by sea in comparison to other means
      of transport. The overview will form
      the basis for an evaluation of the
      competitiveness of carriage by sea in
      comparison to land-based transport.



                             The Government's maritime strategy
                                                 - 53 -
Published by:
Ministry of Trade and Industry

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Publication number: K-0699 E
Printed by: Government Administration Services - 11/2007
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