Ecological transition, new EU rules on state aid until 2025

Aid is expected to accelerate the deployment of renewable energy and energy storage

The European Commission has adopted a new State aid Temporary Crisis and Transition Frameworkwhich will last until the end of 2025, aimed at supporting key sectors for the transition to a net-zero emissions economy. The new Temporary Framework amends and extends the Temporary Framework that was adopted on 23 March 2022 to allow Member States to support the economy in the context of the war in Ukraine, already amended on 20 July and 28 October 2022.

Together with the amendment to the General Block Exemption Regulation, which the Commission approved today, the Temporary Framework will help accelerate investment and funding for clean technology production in Europe. The framework extends the possibility for Member States to support measures necessary for the transition to a net-zero emissions industry, in particular aid to accelerate the deployment of renewable energy and energy storagethe decarbonisation of production processes in industry, which Member States will be able to grant until 31 December 2025.

The framework also modifies the scope of measures to make schemes supporting renewable energy, energy storage and the decarbonisation of production processes easier to design and more effective. This is done first of all by simplifying the conditions for granting aid to small projects and less mature technologies, such as renewable hydrogen, eliminating the need for tendering. The possibilities for support for the deployment of all types of renewable energy sources and for the decarbonisation of industrial processes by switching to hydrogen are expanded. I am foreseen higher aid ceilings and simplified calculations.

The framework introduces new measures, applicable until the end of 2025, to accelerate investments in key sectors for the green transition, allowing investment support for the production of strategic equipment, in particular batteries, solar panels, wind turbines, heat pumps , electrolysers and carbon utilization and storage, as well as for the production of key components and for the production and recycling of related raw materials.

In particular, Member States can provide support limited to a certain percentage of the investment costs and nominal amounts, depending on the location of the investment and the size of the beneficiary. SMEs and companies located in disadvantaged regions can receive higher support. States can grant even higher percentages, if the aid is in the form of tax breaks, loans or guarantees. Before granting aid, however, the national authorities must verify the risk that the productive investment does not end up outside the European Economic Area (EEA) and that there is no risk of relocation within the single market.

In exceptional cases, it is It is possible to provide greater support to individual companies, where there is a risk of investment being diverted out of Europeto. In such a situation, states can provide the amount that the beneficiary could receive for an equivalent investment outside the EU, or the amount needed to incentivize the firm to locate the investment in the EEA, whichever is more Bass. This option is subject to a series of guarantees: it can only be used for investments in certain areas, known as assisted areas; or for cross-border investments involving projects located in at least three Member States, with a significant part of the total investment implemented in at least two assisted areas, one of which is an area A (outermost regions or regions whose per capita GDP is lower or equal to 75% of the EU average). Furthermore, the beneficiary should use state-of-the-art production technology in terms of emissions. Again, the aid cannot involve the transfer of investments between Member States.