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The World Wildlife Fund (WWF) has released a study on fuel subsidies to the fisheries sector in Europe, at a time when the European Commission (EC) is considering raising the limit on financial support that EU governments can provide to their fishing fleets without notifying the EC.

Last November the EC published draft regulations that would raise the de minimis ceiling on state aid to the fisheries sector from € 3000 to € 30 000. The EC has said that the current de minimis ceiling is too low, and raising it would cut down on unnecessary bureaucracy.

However, the proposed regulation does not exclude subsidies to operating costs, sparking concern among some non-government organizations that the EC is opening the door to higher fisheries subsidies that would encourage over-fishing. In particular, these NGOs believe that including operational costs in the new regulations allows for a higher de minimis ceiling on fuel subsidies.

A WWF report released last month, Fuelling the Threat for Sustainable Fisheries in Europe, argues that fuel subsidies to the fisheries sector have negative environmental, economic and social impacts. For the purposes of the report, fuel subsidies are defined to include exemptions or reductions from excise (fuel) taxes. In Europe, operators of fishing fleets normally pay a price for their fuel (chiefly diesel) that is lower than that paid by motorists, but still at least as high as the pre-tax price of fuel. A few EU Member States, however, have offered grants to fishing vessel operators to help defray some of their high fuel costs.

Fuel can be a major part of operational costs for vessel operators - as much as 60% depending on the type of vessel and fishing method. Moreover, the WWF notes that fishing methods that are most damaging to the environment, such as trawling, are some of the most fuel-intensive.

Economic impacts that would result from higher fuel subsidies are linked to the fact that the number of fishing vessels in the EU is strictly controlled. Without such controls, a subsidy would normally encourage more vessels to fish for longer periods, which would lower revenues and industry profits. In the EU, however, subsidies that lower costs would lead to a "shorter fishing season and less efficient use of capital, as boats compete for the same fish under the Total Allowable Catches defined for the entire fleet," writes the WWF.

Greater distorted competition between EU Member States could also result from increased fuel subsidies, warns the WWF. As it is, some Member States subsidize their fishing fleets more than others. Raising the de minimis ceiling could exacerbate those differences.

In a letter sent last month to technical experts from EU member states who advise the EC on fisheries policy, the WWF strongly urged members to oppose the proposed de mimimis regulation as long as it does not explicitly exclude aid to operational costs.

"For the WWF it is a striking contradiction that the Commission intends to open the door for further fuel subsidies just after pledging to phase out environmentally damaging subsidies within its Environmental Action Programme," says the WWF letter.

In addition to the WWF, other NGOs have raised concern about the EC proposal, including Birdlife International, Fisheries Secretariat, North Sea Foundation, Seas at Risk and OCEANA.