News Update State aid

The European Commission ("EC") published a draft for a Commission Regulation amending the General Block Exemption Regulation ("GBER") in the Official Journal of the European Union on 26 October 2021. This follows the launch of the public consultation on 6 October 2021 on the proposed changes.

In a nutshell, the proposal aims to broaden the possibilities for granting aid in specific areas without prior notification and EC approval. This supports the EU's green and digital transition and updates the GBER to align with the revisions of State aid guidelines. At the same time, the proposal tightens some of the conditions for granting aid under the GBER to prevent the granting of aid that may undermine the green and digital transition.

Background

The GBER provides the conditions under which Member States may grant State aid without prior notification and EC approval. The GBER is complementary to various sets of State aid guidelines which set out conditions for the approval of aid to be notified to the EC. In its proposal for amending the GBER, the EC aims to align the GBER with the proposed changes to the State aid guidelines. The broadening is also aimed at adapting the GBER to the measures included in the Member States' national recovery and resilience plans. The financing of these measures must comply with the State aid rules.

Proposed changes to the GBER

To facilitate the provision of aid in the field of environmental protection and energy under the GBER, the EC proposes extending the possibilities for Member States to provide investment and operating aid for various types of "green" projects. This includes increasing the monetary notification thresholds and extending the category of activities that may be eligible for aid under the GBER, such as reducing CO2 emissions, rehabilitating natural habitats and ecosystems, protecting and restoring biodiversity, clean or zero-emission vehicles, and recharging and refuelling infrastructure.

The draft amendment to the GBER also seeks to:

• Facilitate investments in green hydrogen (i.e. produced with renewable energy or low carbon energy sources) by allowing investment aid for green hydrogen projects and investments in hydrogen infrastructure;
• Introduce new additional "green" conditions that need to be fulfilled by large energy-intensive businesses to receive aid in the form of reduced tax rates under the Energy Taxation Directive; and
• Increase the possibilities for the provision of higher investment aid for energy efficiency projects in buildings.

The draft amendment also proposes changes regarding aid for risk finance investment, digitalisation and regional aid. Key changes in these fields are:

• To facilitate the digital transition, the EC proposes the possibility to provide aid for combining the improvement of the energy efficiency of buildings with the installation of equipment for the digitalisation of these buildings;
• On regional aid, the EC proposes introducing new limits to the provision of regional aid, in line with the conditions of the new Regional Aid Guidelines, giving Member States the possibility to provide aid to prevent or reduce depopulation in sparsely populated areas, or both; and
• On risk finance investment, the EC clarifies the rules on eligibility for such aid, for example, for unlisted small and medium-sized enterprises which have not been operating in any market. In addition, the draft amendment proposes a broadening of the aid's scope for start-ups by allowing aid in the form of a transfer of intellectual property rights under certain conditions.

Timing

The adoption of the revised GBER is planned for the first half of 2022. EU citizens and entities can submit their input in the public consultation until 8 December 2021 via the EU's official website. Please contact us to discuss the implications of these changes for your business or the possibility to participate in the public consultation.

Webinar | Climate projects & State aid law: The opportunities and challenges

8 november | 12:00 (CET)
From 1 November until 12 November, we host the Climate Risk & Sustainability Weeks. Our Climate Risk & Sustainability experts host webinars and in-person event on different topics regarding the impact of new or changing climate legislation.

During the webinar Climate projects & State aid law, our State Aid experts Greetje van Heezik and Lorenzo Fiorilli will discuss the possibilities and practicalities of designing investment projects and measures in accordance with the amended State aid rules for climate, environmental protection and energy (draft guidelines and block exemption regulation).

Register for the webinar here.