From Department of Agriculture, Food and the Marine
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Minister for Agriculture, Food and the Marine, Charlie McConalogue, today welcomed the State Aid approval to facilitate the implementation of the voluntary decommissioning scheme for the whitefish fishing fleet recommended by the Report of the Seafood Task Force – Navigating Change (October 2021).
Reacting to the approval decision by the EU Commission Minister McConalogue said:
“The Seafood Task Force, which included representatives of the five fisheries producer organisations and the four main fisheries cooperatives, recommended in its October 2021 report that a voluntary decommissioning scheme should be implemented to help restore balance between fishing fleet capacity and available quotas, following the reductions in quotas for stocks arising from the EU/UK Trade and Cooperation Agreement.”
Minister McConalogue said:
“I have ensured that the dimensions of the Scheme will follow the Recommendations of the Taskforce.” The Task Force considered that a scheme targeting the voluntary decommissioning of vessels with total capacity of up to 8,000 gross tonnes and 21,000 kilowatts could restore the viability of the remaining fleet. Today’s decision makes way for implementing this key recommendation of the Task Force which will offer vessel owners a premium of up to €12,000 per gross tonne. This will comprise a basic premium of €3,600 per gross tonne and a catch incentive premium of up to €8,400. The catch incentive premium paid will reflect the TCA quota stocks catch history of the vessel applying, ensuring that the scheme is most attractive to active vessels, whose voluntary departure from the fleet can contribute most to rebalancing the remaining fleet with the reduced quota available."
The Minister added:
“In line with the Recommendations of the Taskforce I am also requiring that owners of vessels who choose to participate in the scheme must ensure that crew working on their vessel are compensated for their loss of livelihood following the decommissioning of their vessel.”
The scheme provides for a payment by the vessel owner to the crew member for each year of service in the fleet, up to a maximum of €50,000 for a crew member who had worked in the fleet for 40 years.
The Seafood Task Force recommended that in order to achieve the objective of improving the viability of the fleet within available fishing quotas post Brexit a package of tax measures be put in place to support vessel owners who choose to apply to leave the fleet under what is a voluntary exit scheme.
The tax measures recommended by the Seafood Task Force in relation to payments under the scheme were enacted on 2 June 2022 through section 15 of the Finance (Covid-19 and Miscellaneous Provisions) Act 2022, which provide for beneficial treatment of the scheme payments with regard to capital gains and income tax with potential benefit up to €20 million.
Minister McConalogue concluded:
“This scheme flows directly from the recommendations of the Seafood Task Force. I have asked BIM to ensure that the scheme will allow for an adequate period of time for vessel owners to reflect before making what are important decisions in relation to whether or not they wish to avail of the Scheme. The overall package of measures that are being implemented on foot of the Seafood Taskforce Recommendations will contribute to the long-term viability of the fishing fleet, the wider seafood sector and the coastal communities dependent upon it.”
An Bord Iascaigh Mhara (BIM) will administer the Scheme and will publish full technical details and open the scheme in a matter of weeks. A fund of up to €60 million in direct payments is available to deliver the voluntary scheme.
Further details of the Scheme will be available from https://bim.ie/fisheries/funding/
In March 2021, Minister McConalogue set up the Seafood Sector Task Force to examine the implications, arising from the Brexit Trade and Cooperation Agreement, agreed between the European Union and the UK, for the Irish Fishing industry and those coastal communities particularly dependent upon the seafood sector. The Task Force, chaired by Aiden Cotter, was charged with recommending initiatives that could be taken to provide supports for development and restructuring, so as to ensure a profitable and sustainable fishing fleet and to identify opportunities for jobs and economic activity in coastal communities dependent on fishing.
Minister McConalogue received the Report of the Seafood Task Force – Navigating Change on 11 October 2021. The report recommended 16 support schemes at a total estimated cost of €423 million. These stakeholder recommendations have been urgently examined across Government with particular regard to available funds, eligibility of the recommended measures for funding under the EU Brexit Adjustment Reserve and with regard to Scheme design, State Aid rules and the Public Spending Code. Many of the Recommended schemes , including all the larger Schemes, have already been announced and are being implemented or have been completed since the Report was received.
Section 9.8 of the Task Force report stated: “The Task Force considers that this package of measures will help to restore balance between fleet capacity and available quotas, therefore ensuring the profitability of the whitefish vessels remaining. The Task Force recommends the target for the scheme should be to remove 60 vessels of around 8,000 gross tonnes and 21,000 kilowatts at a premium of up to €12,000 per gross tonne including the crew and scrapping costs. The Task Force recommends that the proposed restructuring programme involving the elements detailed including appropriate payments to crew should be developed into a fully costed scheme as a matter of urgency, noting that to avail of BAR funding permanent cessation must be completed by the end of 2022.[Subsequently amended to 2023 by updated State Aid Guidelines] The Task Force recommends that a package of tax measures similar to the 2008 permanent cessation scheme is put in place. The Task Force also recommends that the 5-year preclusion for crew re-entering the sector following the receipt of support that is included under the EMFAF should be omitted from the scheme if at all possible.
The Brexit Voluntary permanent Cessation Scheme is open to licence holders of fishing vessels that are registered on the Irish sea-fishing boat register in the polyvalent or beam trawl segments and holding a valid sea-fishing boat license issued by the Licensing Authority for Sea-Fishing boats at the time the decision is taken to grant the withdrawal premium and that are 10 years or more in age at the time of application, and have carried out at least 90 days of fishing activity at sea per year during the previous two calendar years preceding the date of submission of the application for support or during the calendar years 2018 and 2019.
Vessels that were granted capacity under the 2001 Lost at Sea Scheme may also apply. However, as the capacity associated with such vessels is non-transferable and cannot be sold or traded, applications from the owners of such vessels will be eligible for the catch incentive premium only.
As required under EU State Aid conditions, the amount of aid for permanent cessation will be reduced by the amount of support received (if any) under the Brexit Temporary Fleet Tie-up Scheme and the amount of income loss support received by the applicant either from the BAR or from other sources in the period between 1 January 2021 and the date of receiving the payment for the permanent cessation aid.
Owners of vessels participating in the scheme must ensure that crew working on their vessel are compensated for their loss of livelihood following from decommissioning of their vessel. For crew to be eligible for support, they must have worked at least 90 days at sea per year for each of the last 2 calendar years preceding the year of submission of the application for decommissioning, on board an Irish registered fishing vessel that has been approved for decommissioning under this scheme. In calculating the crew payment due, the vessel owner shall fully take into account the verified prior service of the individual on board other Irish registered fishing vessels. The following crew payment rates shall apply. These payments are without prejudice to any obligations in law on a vessel owner as an employer.