State aid: European Commission and the General Block Exemption regulation
On 6 October 2021, the European Commission (Commission) invited Member State and all interested parties to comment on further amendments to the General Block Exemption Regulation (GBER) regarding aid measures for the green and digital transition. The proposal follows the recent amendment of the GBER in July 2021 to align the State aid rules with funding rules under the new Multiannual Financial Framework.
The GBER identifies categories of State aid compatible with Articles 107-109 of the Treaty on the Functioning of the European Union (TFEU) if they satisfy certain conditions. They are then exempted from prior notification to and approval by the Commission. The latest GBER proposal aims at broadening the possibilities for Member States to implement aid measures regarding the green and digital transition without prior notification and approval by the Commission (as is usual outside the GBER). The rules laid down in the GBER complement those set out in various State aid Guidelines (which set the conditions under which the Commission assesses if State aid measures that are not block-exempted by the GBER and, therefore, need to be notified are compatible with the TFEU. The aim is to promote public funding which contributes to the Green Deal and the EU's industrial and digital strategies, and to ensure that State aid rules reflect the most recent market and technological developments.
In this context, the Commission is proposing a number of changes to the GBER in areas where the corresponding State aid Guidelines are being revised. In particular:
Aid for environmental protection and energy
- Extending the possibilities for Member States to provide support for various types of “green” projects, such as, the reduction of CO2 emissions.
- Introducing new green conditions that need to be fulfilled for large energy-intensive businesses to receive block-exempted aid in the form reduced tax rates under the Energy Taxation Directive.
- Catering for the increased role of storage for the integration of renewable energy in the electricity system, by widening the existing exemptions for investment and operating aid for renewable energy.
- Facilitating investments in green hydrogen, by providing exemption for investment aid for green hydrogen projects and investments in hydrogen infrastructure.
- Incentivising renovation projects, by introducing a green bonus (i.e. higher block-exempted aid intensities) for aid for improving the energy performance of buildings.
Aid for risk finance investment
- Clarifying the rules on risk finance aid, in line with the parallel revision of the Risk Finance Guidelines (e.g. clarifying the rules on eligibility for such aid under the GBER).
- Widening the scope of aid for start-ups to include aid in the form of transfer of intellectual property rights (IPR) from a research organisation where the underlying IPR has been developed to small and innovative enterprises.
Aid for research, development and innovation
- Simplifying the conditions for granting research, development and innovation aid without prior notification and approval.
- Aligning the conditions with the new Regional Aid Guidelines.
The revised GBER is planned for 2022.
For more information on this post please contact Alan McCarthy, Partner or any member of A&L Goodbody's EU, Competition & Procurement team.
Date published: 25 May 2022