New State aid framework enables support for clean industry

The European Commission has today adopted a new State aid framework supporting the Clean Industrial Deal (CISAF), to enable Member States to push forward the development of clean energy, industrial decarbonisation and clean technology. The CISAF sets out the conditions under which Member States can grant support for certain investments and objectives in line with EU State aid rules. Under the Framework, the Commission will authorise aid schemes introduced by Member States to boost clean industry, enabling the swift roll-out of individual aid.  The CISAF will be in place until 31 December 2030, giving Member States and businesses long-term predictability. The CISAF replaces the Temporary Crisis and Transition Framework (TCTF), which was in place since 2022.

The framework simplifies State aid rules in five main areas:

– the roll-out of renewable energy and low-carbon fuels;

– temporary electricity price relief for energy-intensive users to ensure the transition to low-cost    clean electricity;

– decarbonisation of existing production facilities;

– the development of clean tech manufacturing capacity in the EU, and;

– the de-risking of investments in clean energy, decarbonisation, clean tech, energy — – infrastructure projects and projects supporting the

   circular economy.

In more detail, the framework allows for the following:

A ‘fast-track’ for the rollout of clean energy. The new framework covers support for both renewable energy and low-carbon fuels. Renewables are essential for achieving the decarbonisation goals of the Clean Industrial Deal. The CISAF introduces simplified procedures to enable the quick roll-out of renewable energy schemes. Low-carbon fuels, such as blue and green hydrogen, also play a key role in reducing emissions. They support the transition for companies in ‘hard-to-decarbonise’ sectors, where more energy or cost-efficient options are not yet viable.

New rules on flexibility measures and capacity mechanisms give Member States additional tools to integrate intermittent renewable electricity sources (i.e. wind and solar power) into the energy supply, while ensuring consumers benefit from reliable electricity supply. The CISAF defines ‘target model’ capacity mechanisms, where Member States pay electricity providers to maintain standby capacity, which can qualify for ‘fast-track’ approval. Other designs will be assessed under the Climate, Environmental protection and Energy Aid Guidelines (CEEAG).

Support for electricity costs for energy-intensive users. Member States may provide electricity price support for companies operating in sectors particularly exposed to international trade, and heavily dependent on electricity for their production (energy-intensive users). This will allow Member States to reduce the electricity costs of energy-intensive users that face higher costs than competitors in regions with less ambitious climate policies. In return for receiving price support, companies will be required to invest in decarbonisation.

Flexible support for investments in all technologies leading to decarbonisation or increased energy efficiency.  The framework allows for support for a wide array of decarbonisation technologies such as electrification, hydrogen, biomass, carbon capture utilisation and storage.

Source:  European Commission