State aid: Commission further consults Member States on prolongation and adjustment of Temporary Crisis Framework

The European Commission is further consulting Member States on a prolongation and adjustment of the State aid Temporary Crisis Framework to support the economy in the context of Russia's war against Ukraine, adopted by the Commission on 23 March 2022 and first amended on 20 July 2022. This follows a first consultation of Member States launched on 5 October 2022.

In view of the prolonged aggression of Russia against Ukraine and of its direct and indirect effects on the economy and on the energy situation, the Commission already consulted Member States, among others, on the possible prolongation of the Temporary Crisis Framework and the addition of new tools aimed at supporting electricity demand reduction.

Taking into account feedback already received from Member States and in light of the the recent Regulation on an emergency intervention to address high energy prices (‘Regulation (EU) 2022/1854') and the Commission's proposal on a new emergency regulation, the Commission is now further consulting Member States, in particular on possible amendments relating to:

• A targeted adjustment to broaden the possibility for Member State to provide public guarantees to energy companies in order to cover the financial collaterals for their trading activities in view of current market prices and volatility; and
• Additional adjustments to further allow Member States to provide support to companies affected by high energy prices. The main objective of the proposal is to further increase flexibility for a faster and more effective support for companies that are faced with significant increases of their energy costs while protecting the level playing field in the Single Market.

The proposed amendments complement Regulation (EU) 2022/1854. They aim at ensuring that the Temporary Crisis Framework continues to enable Member States to provide necessary and proportionate support to the economy while ensuring a level playing field.

The Commission intends to adopt the revised Temporary Crisis Framework by the end of October, taking into account the feedback received from the Member States and, where relevant, elements of the Commission's proposal on a new emergency regulation to address high gas prices in the EU and ensure security of supply this winter.  

Background

The State aid Temporary Crisis Framework, adopted on 23 March 2022, enables Member States to use the flexibility foreseen under State aid rules to support the economy in the context of Russia's war against Ukraine.

The Temporary Crisis Framework was amended on 20 July 2022, to complement the Winter Preparedness Package and in line with the REPowerEU Plan objectives.

The Temporary Crisis Framework, as currently in force, provides for the following types of aid, which can be granted by Member States:

• Limited amounts of aid, in any form, for companies affected by the current crisis or by the subsequent sanctions and countersanctions up to the increased amount of 62,000€ and 75,000€ in the agriculture, and fisheries and aquaculture sectors respectively, and up to 500,000€ in all other sectors;
• Liquidity support in form of State guarantees and subsidised loans;
• Aid to compensate for high energy prices. The aid, which can be granted in any form, will partially compensate companies, in particular intensive energy users, for additional costs due to exceptional gas and electricity price increases. The overall aid per beneficiary cannot exceed 30% of the eligible costs and – in order to incentivise energy saving – should relate to no more than 70% of its gas and electricity consumption during the same period of the previous year, up to a maximum of €2 million at any given point in time. When the company incurs operating losses, further aid may be necessary to ensure the continuation of an economic activity. Therefore, for energy-intensive users, the aid intensities are higher and Member States may grant aid exceeding these ceilings, up to €25 million, and for companies active in particularly affected sectors and sub-sectors up to €50 million;
• Measures accelerating the rollout of renewable energy. Member States can set up schemes for investments in renewable energy, including renewable hydrogen, biogas and biomethane, storage and renewable heat, including through heat pumps, with simplified tender procedures that can be quickly implemented, while including sufficient safeguards to protect the level playing field. In particular, Member States can devise schemes for a specific technology, requiring support in view of the particular national energy mix; and
• Measures facilitating the decarbonisation of industrial processes. To further accelerate the diversification of energy supplies, Member States can support investments to phase out from fossil fuels, in particular through electrification, energy efficiency and the switch to the use of renewable and electricity-based hydrogen which complies with certain conditions. Member States can either (i) set up new tender-based schemes, or (ii) directly support projects, without tenders, with certain limits on the share of public support per investment. Specific top-up bonuses would be foreseen for small and medium-sized enterprises as well as for particularly energy efficient solutions.

Sanctioned Russian-controlled entities will be excluded from the scope of these measures.

The Temporary Crisis Framework, as currently in force, is applicable until 31 December 2022 for the liquidity support measures and measures covering increased energy costs. Aid supporting the roll-out of renewable energies and the decarbonisation of the industry may be granted until end of June 2023.

More information on the Temporary Crisis Framework and other actions taken by the Commission to address the economic impact of Russia's war against Ukraine can be found here.