State aid: Commission consults Member States on proposal for a Temporary Crisis and Transition Framework

The European Commission has sent to Member States for consultation a draft proposal to transform the State aid Temporary Crisis Framework into a Temporary Crisis and Transition Framework to facilitate and accelerate Europe’s green transition. This proposal is part of the Green Deal Industrial Plan, also presented today – in particular, it contributes to its second pillar aiming at ensuring faster access to funding for companies operating in the EU.

Today’s proposal for a Temporary Crisis and Transition Framework aims to boost investments for a faster roll-out of renewable energies as well as to support the decarbonisation of the industry and the production of equipment necessary for the net-zero transition, while preserving the integrity and level playing field on the Single Market.

The Commission is consulting Member States on possible amendments aimed at:

• Further facilitating the roll-out of renewable energy and decarbonising the industry by including the possibility to: (i) support the deployment of all renewable energy sources; (ii) grant aid for less mature technologies, such as renewable hydrogen, without a competitive bidding, provided that certain safeguards to ensure the proportionality of public support are in place; and (iii) incentivise investments leading to a significant reduction of emissions by including higher aid ceilings and simplified aid calculations (as an example, the aid would simply be determined as a share of investment costs).
• Supporting investments in the production of strategic equipment necessary for the net-zero transition, in order to accelerate the transition to a net-zero economy and overcome the current energy crisis. In particular, the Commission is proposing to address the productive investment gap in sectors strategic for the green transition. This comes in the context of global challenges posing a threat of new investments in these sectors being diverted in favour of third countries outside Europe. In particular, the Commission proposes to allow support from Member States for the production of batteries, solar panels, wind turbines, heat-pumps, electrolysers and carbon capture usage and storage as well as the related critical raw materials necessary for the production of such equipment. For projects that take place in disadvantaged regions in the EU (where the GDP per capita is below 75% of the EU average) or which involve an investment in several Member States, and for which support in third country is available, further proportionate aid would be allowed to match the level of support offered in third countries, up to what is necessary to enable the investment to be made in Europe.

These new provisions would be in place until 31 December 2025. Member States now have the possibility to comment on the Commission’s draft proposal. The Commission intends to adopt the Temporary Crisis and Transition Framework in the coming weeks, taking into account the feedback received from the Member States.

Source: European Commission