The EU’s Council of Fisheries Ministers yesterday agreed an emergency response to the fuel price “crisis” that has the right aims but includes too many potentially counter-productive measures.

After a race against the clock the European Commission put together the package of emergency measures endorsed by the Council. It is not clear why after months of raising fuel prices, all of a sudden the measures had to be rushed through Council before the summer break. Such haste resulted in the adoption of measures that will relieve the fishing sector in the short term, but will probably back-fire in the long term.

The EU’s Council of Fisheries Ministers yesterday agreed an emergency response to the fuel price “crisis” that has the right aims but includes too many potentially counter-productive measures.

After a race against the clock the European Commission put together the package of emergency measures endorsed by the Council. It is not clear why after months of raising fuel prices, all of a sudden the measures had to be rushed through Council before the summer break. Such haste resulted in the adoption of measures that will relieve the fishing sector in the short term, but will probably back-fire in the long term.

The main cause for the serious problems of the European fishing fleet is that too much fishing effort is being deployed to catch fish from already depleted stocks. In 1995, the over capacity of the European fishing fleet was estimated at 40%, leading to ever increasing over fishing of up to 88% of the fish stocks this year. Dwindling stocks have forced fishers to go further and deeper to find fish, often using fuel-intensive fishing techniques and inflicting “collateral damage” on vulnerable marine ecosystems. In doing so they end up burning more fuel per kilo of landed fish, leading to a destructive cycle of depleted fish stocks, increasing fuel use and CO2 emissions, and the destruction of marine life. High fuel prices are now only highlighting this problem.

The adopted emergency package states a laudable aim to reduce fishing capacity and to shift to less fuel intensive fishing techniques, but several of the measures are counterproductive. Provision of subsidies to buy new, more energy-efficient engines with at least 20% less power are likely to contribute to an increase in fishing capacity since proper control of horse power is in practice nearly impossible and new, technologically improved engines result in productivity gains of on average 1-3% annually (“technological creep”). Rather than seeking a quick fix solution by acquiring new engines, a real long-term solution should be sought in alternative, energy efficient fishing techniques with a low impact on the environment.

The problems of poor control and technological creep also undermine the adopted measures for partial decommissioning, which foresee subsidies to scrap vessels while allowing replacement with new vessels with 40% or less of the capacity of the scrapped vessel.

In addition to the emergency package, the Commission is considering to increase the maximum ceiling for aid that a Member State can give to the fishing sector without notifying the Commission from €30,000 per company to €30,000 per vessel with a maximum of €100.000€ per company. This would come only one year after the Commission adopted a 10 fold increase of such state aid. Yet another increase would be a real waste of tax payers’ money, since it can be used to directly subsidise fuel, which is already cheaper for fishers than for other diesel fuel users through tax exemption. Fuel subsidies result directly or indirectly in the build-up of excessive fishing capacity and promote the use of fuel-intensive fishing techniques.

The proposed increase in state aid is a remarkable policy contradiction by the Commission, who in the past pointed out that public intervention to compensate for an increase in fuel costs would be incompatible with the Treaty. The EU has also committed itself to removing environmentally damaging subsidies and the Commission announced that by 2008 it would put forward a roadmap for the reform, sector by sector, of these subsidies with a view to eliminating them. It is hard to see how they intend to propose to eliminate harmful subsidies within months of increasing them.

The measures discussed and adopted yesterday by the Council are not devoid of valid points, and in several instances the reasoning behind the proposed measures is environmentally as well as economically sound. However, measures such as partial decommissioning, subsidies for new engines and the increase in state aid show that the rush to respond to the crisis overcame the need for proper consideration of the best long-term structural solutions.

Commission's proposal for a Council Regulation

Council Conclusions

Article in The Guardian about interlinkages between fuel consumption and ecosystem disruption