On 23 April 2009 the authorities of the United Kingdom notified to the Commission, in accordance with Article 88(3) of the EC Treaty, an aid scheme. The objective of the scheme is to support the modal shift of freight from road to water by means of granting support to costal and short sea shipping services on the condition that they avoid journeys by lorry and that they generate environmental benefits within the UK. Beneficiaries must undertake to move a specified annual freight tonnage by water.
 
The estimated annual budget amounts to GBP 2 million in England. For Scotland, there is an annual budget of GBP 8 million shared between this scheme and the new Mode Shift Revenue Support scheme (the MSRS scheme). Undertakings of all sizes are eligible. The estimated number of beneficiaries of the scheme amounts to 10. The subsidy will be granted as a direct non-refundable investment grant.
 
The Commission concluded that the notified aid scheme involves aid within the meaning of Article 87(1) of the EC Treaty and is hence, in principle, prohibited, unless deemed compatible with the common market by virtue of any of the exemptions provided for by the Treaty or secondary legislation.
 
" short-sea shipping is a liberalised market at EU level. When aid granted by a Member State strengthens the position of an undertaking compared with other undertakings competing in intra-Community trade, the latter must be regarded as affected by that aid. It is sufficient that the recipient of the aid competes with other undertakings on markets open to competition." (par. 34 of the letter from the EC to United Kingdom - Brussels, 3.7.2009 C(2009) 5417)
 
The Community guidelines on State aid to maritime transport(hereinafter the Maritime Guidelines) provide for a framework of assessing the compatibility of State aid measures to maritime transport under Article 87(3)(c) of the Treaty. The Commission therefore concluded that the aid scheme under scrutiny is necessary to pursue a Community objective and that the advantage conferred by it is not disproportionate insofar as it does not have an adverse impact on competition and on Community trade. The Commission therefore concludes that the aid is compatible with Article 87(3)(c) of the EC Treaty.
 
Update
On 7 January 2015, the European Commission approved the extension of the scheme until 31 March 2020.

Update

On 21 January 2020, the European Commission approved the extension of the scheme until 31 March 2026. The estimated overall budget will amount to GBP 12 million (USD 15.7 million). 
 
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.