Port of Helsinki
9.6.2020 20:02:58 //
Juha Peltonen
Suomen Ilmakuva Oy

Finland is the largest beneficiary of EU funding for maritime transport projects

Finland has been the largest beneficiary in the current round of EU funding for shipping projects. A core corridor of the Connecting Europe Facility currently extends from the Baltic to Helsinki. During the period beginning next year, a proposal will be made to extend this corridor all the way through Finland to Tornio. This would bring many railway projects with significance for ports within the scope of EU funding.

The European Union’s transport policy is seeking to increase economic activity and reduce harmful transport emissions in Europe.  To this end, the EU has specified the Trans-European Transport Network (TEN-T), which covers all modes of transport and consists of two levels: a core network to be built by the end of 2030 and a comprehensive network that is scheduled for completion by the end of 2050.

The Motorways of the Sea are the maritime pillar of TEN-T transport policy, and seek to improve sea connections between ports. During the current funding period (2014–2020), Finland and Finnish companies have been the major beneficiaries in Motorways of the Sea projects. Finland has received a total of EUR 77.7 million in EU funding for Motorways of the Sea projects, that is, roughly the same amount as the second-largest beneficiary (France, EUR 41.1 million) and the third-largest beneficiary (Sweden, EUR 36.8 million) combined.

Through the Connecting Europe Facility (CEF), which is the TEN-T’s financing instrument, Finland was allocated a total of EUR 188 million during the previous funding period (2007–2013), of which about EUR 45 million was for maritime transport projects. During the current period (2014–2020), Finland has to date received about EUR 185 million, of which approximately EUR 115 million is for maritime transport.

“In recent years, both we and our stakeholders have been investing hundreds of millions of euros in a variety of projects in order to build the world’s most functional harbour and its associated transport and travel routes. The EU projects we’ve coordinated have involved several shipping companies and other important stakeholders. We’ve obtained considerable financial support for several projects from the EU’s TEN-T and CEF systems, and this will benefit Finland as a whole,” says Pekka Meronen, Vice President, Finance, ICT and Development at the Port of Helsinki.

Juha Parantainen from the Ministry of Transport and Communications says that the EU will no longer provide any funding for road transport projects.

Juha Parantainen
Juha Parantainen. Picture: Timo Porthan.

“It’s a result of climate policy, which wants to promote rail transport. As a byproduct, this has also led to increased funding for maritime transport projects."

In Finland, about 8,800 kilometres of roads and railway tracks, including 18 airports and 12 ports, fall within the scope of the TEN-T. The core network has about 2,460 kilometres of roads and railway tracks in Finland. It also includes Saimaa’s waterways; transport nodes in Helsinki and Turku; the ports of Hamina-Kotka, Helsinki, Turku and Naantali; and the Kouvola road and rail terminal.

“As the TEN-T is such an extensive network, the Commission does not wish to support the comprehensive network in a way that would spread funding over too broad an area and thereby prevent visible results from being achieved quickly. That’s why the majority of the funding is allocated to investments in the core network, that is, the most important routes,” says Parantainen.

Shipping companies also hoping for research funding

Tiina Tuurnala, Managing Director of the Finnish Shipowners’ Association thinks that, considering Finland’s exceptionally difficult winter conditions and its dependence on maritime transport, Finland is justified in being the largest beneficiary of Motorways of the Sea funding.

“Finland is the only country in the world whose ports all freeze during a normal winter, and almost 90 per cent of Finland’s foreign trade is conducted by sea. This means that its Motorways of the Sea must operate smoothly in all conditions,” she says.

Tiina Tuurnala
Tiina Tuurnala. Picture: Timo Porthan

In addition to safeguarding winter shipping, EU-funded projects have focused on environmental investments and reducing emissions.

“Shipping is already one of the most environmentally friendly modes of transport, and all of the sector’s operators are investing considerable amounts in reducing emissions. An emission-free solution for shipping is being fervently sought,” says Tuurnala.

She hopes that shipping will continue to be a focus for future EU funding.

“For example, Finland will be seeking a significant amount of financing to promote low-emission shipping via the Green Deal programme. It’s also time to allocate a clear programme of research funding dedicated to shipping. Rail transport and aviation received their own project packages in the Horizon 2020 programme. It’s now important to allocate considerable funding for research and development in zero-emission shipping within the framework of the Horizon Europe programme,” says Tuurnala.

The Green Deal is a work programme that was published when the new Commission took office. It lists the legislative amendments that the Commission intends to propose during its term. The Green Deal primarily focuses on curbing climate change. It is not a package that will be decided on at once, but rather a collection of legislative proposals to be discussed by the EU Parliament and Council.

Juha Parantainen believes that funding for future alternative fuel systems will continue to be one of the EU’s priorities.

“The Green Deal programme quite clearly states that the Commission intends to open up special calls for applications to promote alternative fuels. Ports can play a leading role in this area,” says Parantainen.

He has been handling Connecting Europe Facility matters at the Ministry of Transport and Communications for a couple of years now, with a previous stint in the 2000s. Parantainen reminds us how the Motorways of the Sea regulation took shape.

“It was in our interest at the time to create an instrument that we could use to connect ourselves with continental Europe, as Finland is in some ways an island within the EU. The projects also contain land transport sections and terminal investments, and at least two Member States must always be involved. Finland has mainly been involved in projects with Estonia, Sweden and Germany, and Finland has gained the most from this concept.” 

New funding period begins in 2021

The next seven-year period of CEF funding starts at the beginning of next year. The budget and rules on how to use the funding over the coming period – that is, the CEF Regulation – are always prepared separately. Funding decisions form part of the Union’s overall budget. Heads of State were in negotiation at the end of February, but a consensus was not reached. Before the coronavirus pandemic, another meeting of Heads of State was suggested for May.

“The Commission may have to amend its proposal as a consequence of the coronavirus. However, some kind of decision will have to be made this year, as the funding period starts at the beginning of next year,” says Parantainen.

Finland’s CEF funding

The Commission’s current proposal recommends about EUR 27 billion for developing the TEN-T. Funding has also be set aside for the Motorways of the Sea. The EU’s funding framework is a matter for Member States to decide, which is why the Heads of State must negotiate the framework and the European Parliament’s role is merely to approve it. The Commission must also formally approve the budget.

Whereas the funding decision covers the entire EU budget, the CEF Regulation only covers the transport, energy and telecommunications sectors in which CEF funding is used. Parantainen believes that once this financial decision is made, the CEF Regulation will be quickly finalised, as the package is practically ready to be negotiated. He thinks that the proposed regulation is extremely favourable from Finland’s perspective.

From main line to core network corridor

The regulation contains a narrower level of the core network, consisting of feeder routes called core network corridors. To date, the only core network corridor in Finland has been along the southern coast, running from Turku to Vaalimaa.

“We’ve had a bit of a problem in that, although we’ve received plenty of funding for maritime transport, Finland’s only core network corridor involves no major railway projects. As funding can no longer be obtained for road projects, we’ve been receiving less support for major infrastructure than we did 10–15 years ago,” says Parantainen.
Another core network corridor that reaches Finland extends from the Baltic to Helsinki.

“The Commission is now proposing that this route from the south be continued through Finland all the way to Tornio, and then onwards into Sweden and finally to Narvik in Norway. A great deal of projects would then be eligible for support,” says Parantainen.

Finland’s main railway line is located in the proposed continuation of the North Sea–Baltic Sea core network corridor from Helsinki to Tornio.

“When we get the Finnish section on the map, there are a lot of potential railway projects that would also be significant for port transport.”