ICEWIN

Economic effects of transport interruptions due to ice winters in the Baltic Sea

The need for icebreaking assistance depends on many factors such as the severity of an ice winter, prevailing winds, technical characteristics of merchant ships and traffic frequency. Therefore, due to limited icebreaking resources, there is a wide variety in the levels of service. Merchant ships are sometimes forced to wait up to several days for icebreaker assistance. Under the present conditions, the competitiveness of the northern Baltic Sea countries is undermined in relation to other EU member states.

In the ICEWIN project, funded by the EU Commission, research focused on the improvement of icebreaking assistance service. The study's main results may be summarized as follows:

  • The icebreaking capacity in the Gulf of Finland is not utilized efficiently, when looking at the winter navigation of the whole Gulf of Finland
  • By means of a new type of agreement, levels of service can be improved even with present icebreaking resources
  • Characteristics of the existing commercial fleet play a crucial role in determining icebreaking needs

TML  analysed the effects of a hard ice winter with insufficient icebreaking resources. For countries such as Sweden, Finland, Estonia, etc. the Baltic Sea is important for transport, both for import and export. Hence, if icebreaking activities are hindered or even stopped due to scarce resources, this would seriously affect the economies of the countries surrounding the Baltic Sea. TML's analysis focused on the effect of interrupted maritime transport on

  • import and export of goods
  • price level
  • consumption
  • production activities

Our main objective was to develop a methodology, using the general equilibrium model EDIP, to estimate these effects. Given the location and the share of maritime imports and exports, the largest effect on GDP was found for Finland. For Poland and Lithuania, the effect on GDP was relatively limited. In general, we found that domestic prices vary significantly between different commodities. Overall, we see that the domestic price of mostly locally produced and exported goods decreases as export restrictions increase the supply in the country, while goods which are mainly imported increase in price.

reports

TML deliverables:

period

2009-2011

funded by

European Commission, FP7

partners

VTT (FI) - (Coordinator), Hama Investeeringud (EST), Aker Arctic Technology (FI)

researchers

Eef Delhaye, Karel Spitaels, Christophe Heyndrickx

contact

Eef Delhaye

+32 16 74.51.22
reference: 08.19


This project has received funding from the European Union’s Seventh Framework Programme for research, technological development and demonstration under grant agreement no 234104