The funding, distributed between 2000 and 2006, "was intended to progress fleet capacity reduction" and help the sector cope with related restructuring, argues a report by the Pew Environment Group.
But only 17% of the funds were used to scrap vessels to reduce fishing capacity or to protect marine resources, alleges the report, published on 30 March.
According to the NGO, 29% of the funding went on supporting "negative measures" for fish stocks, such as building new vessels and modernising existing ones, which contribute to both the overcapacity of European fleets and overfishing. 54% of the subsidies were found to have had a "neutral" impact on fishing capacity.
The report also notes that there was "no attempt to link funding applications with the specific stock targeted by those applicants," and therefore no control over whether EU public money was used to help catch species whose conservation status is poor.
The report was published just a few weeks before the European Commission is expected to table its own review of the effectiveness of fisheries funds.
While the Commission is expected to address the overall effectiveness of subsidies across the EU's 27 member states, the Pew Environment Group study analysed their use in ten EU countries which together "accounted for 93%" of the subsidies: Spain, Italy, France, Portugal, Greece, the UK, Denmark, Germany, Poland and Sweden.
The NGO report examines in detail the environmental issues related to EU subsidies, such as changes in fleet capacity and the status of stocks targeted by subsidised vessels, as well as the social impact of the aid, said Tim Huntington, director of Poseidon Aquatic Resource, the UK consultancy which drafted the report.
The Commission notes that in order to tackle the overcapacity of the EU fleet, it was agreed that public aid for vessel modernisation and rebuilding would be phased out in the 2002 reform of the Common Fisheries Policy (CFP).
Inequalities in distribution
The study also highlights that twice as much funding was devoted to scrapping small vessels than for their modernisation and construction. At the same time, vessels over 12 metres in length received "significantly more monies" for construction or modernisation than scrapping.
Markus Knigge, policy and research director at the Pew Environment Group, said that in Spain, the biggest beneficiary of EU subsidies (46%), only 25% of fishermen benefitted from EU money.
"Some people make big money out of this," he suggested.
With a review of the European Fisheries Fund review coming up, the Pew Environment Group is calling for funding the modernisation of vessels to be brought to an end as it contributes to overcapacity. It also argues the money should be distributed more equally as EU aid currently helps only the few.
Knigge stressed that environmental NGOs are against aid for both modernising vessels and 'greening' them, as even environmentally-compliant vessels add to the overall overcapacity and thus contribute to overfishing.
