Commission approves €520 million Luxembourgish State aid schemes to foster the transition to a net-zero economy

The European Commission has approved two Luxembourgish schemes with a total budget of €520 million to help manufacturing companies to decarbonise their production processes and to support investments in strategic sectors to foster the transition to a net-zero economy. The schemes were approved under the State aid Temporary Crisis and Transition Framework (‘TCTF’) adopted by the Commission on 9 March 2023 and amended on 20 November 2023 and on 2 May 2024.

Luxembourg notified to the Commission, under the TCTF, two schemes to (i) support the decarbonisation of industrial production processes (‘decarbonisation scheme’) and (ii) accelerate investments for the production of relevant equipment necessary to foster the transition to a net zero economy (‘scheme for investments in strategic sectors’). Under both schemes the aid will take the form of direct grants.

The decarbonisation scheme is open to companies active in the manufacturing sector currently relying on fossil fuels. To be eligible, projects must allow to reduce the greenhouse gas emissions of the industrial installations concerned by at least 40% compared to the situation before the aid by means of electrification of their production processes. The scheme for investments in strategic sectors will support investments for the production of batteries, solar panels, wind turbines, heat-pumps, electrolysers, equipment for carbon capture usage and storage, as well as key components designed and primarily used as direct input for the production of such equipment or related critical raw materials necessary for their production. The Commission found that the Luxembourgish schemes are in line with the conditions set out in the TCTF.

Source: European Commission