State aid: Commission amends General Block Exemption rules to further facilitate and speed up green and digital transition

The European Commission has endorsed a targeted amendment to the General Block Exemption Regulation ('GBER') to further facilitate, simplify and speed up support for the EU's green and digital transitions.

Together with the new Temporary Crisis and Transition Framework, this targeted amendment aims at making it easier for the Member States to grant necessary support for key sectors in line with the Green Deal Industrial Plan.

Green Deal GBER amendment

The GBER declares specific categories of State aid compatible with the Treaty on the Functioning of the European Union, provided that they fulfil certain conditions. It therefore exempts these categories from the requirement of prior notification to and approval by the Commission, enabling Member States to grant the aid directly and informing the Commission only ex-post.

Today's amendment grants Member States more flexibility to design and implement support measures in sectors that are key for the transition to climate neutrality and to a net-zero industry. It will help speeding up investment and financing for clean tech production in Europe, in line with the Green Deal Industrial Plan.

The new rules reflect the recent changes to various sets of State aid Guidelines to ensure that the GBER remains fit for the green and digital transition.

They will also set the right foundations to tackle some of the economic effects stemming from Russia's war against Ukraine and contribute to the recovery of Europe's economy, affected also by the coronavirus pandemic and the high energy prices.

In particular, the revised rules:

• Increase and streamline the possibilities for aid in the area of environmental protection and energy, among others to support the rollout of renewable energy, decarbonisation projects, green mobility and biodiversity, as well as to facilitate investments in renewable hydrogen and to increase energy efficiency;
• Facilitate the implementation of certain projects involving beneficiaries in several Member States, such as Important Projects of Common European Interest (‘IPCEI'), in the research and development field, by increasing the aid intensities as well as the notification thresholds;
• Extend the possibilities for training and reskilling across sectors by exempting from notification training aid below €3 million;
• Block exempt aid measures set up by Member States to regulate prices for energy such as electricity, gas and heat produced from natural gas or electricity;
• Introduce a very significant increase of notification thresholds for environmental aid as well as for Research, Development and Innovation (‘RDI') aid;
• Clarifies and streamlines the possibilities for risk finance aid, for small and medium-sized enterprises (‘SMEs') and start-ups, as well as for financial products supported by the InvestEU Fund;
• Prolongs the GBER until the end of 2026 for legal certainty and regulatory stability;
• Increases the thresholds in the GBER even beyond the areas under specific review to cater for the longer period of validity of the rules; and
• Aligns the provisions of the GBER with the new Regional Aid Guidelines, the Climate, Energy and Environmental State aid Guidelines, the Risk Finance Guidelines, the Research, Development and Innovation Framework and the Broadband Guidelines.

Next steps

Following today's endorsement by the Commission of the English text of the Regulation, the latter will be formally adopted in the coming weeks following the translation of the text in all official languages of the EU. It will then enter into force on the day following its publication in the Official Journal of the European Union. The text of the amending Regulation endorsed today is available here.

Background

Article 108(3) of the Treaty on the Functioning of the European Union requires Member States to notify all State aid to the European Commission and to implement it only after the Commission's approval. The EU State aid Enabling Regulation allows the Commission to declare that certain categories of State aid are compatible with the Single Market and exempted from the notification obligation provided for in the Treaty.

The General Block Exemption Regulation allows Member States to implement certain aid measures directly, with full legal certainty. The 2014 General Block Exemption Regulation exempts certain categories of State aid from the requirement of prior notification to the Commission, when the benefits to society outweigh the possible distortions of competition. As a result, more than 90% of all new State aid measures excluding crisis measures are now implemented by Member States without the need for prior approval by the Commission. This is in line with the Commission's approach to focus on delivering more and faster, while doing less where it does not have an added value.

The fact that a State aid measure does not meet the criteria of the GBER does not mean that it is incompatible with EU state aid rules. It only means that the measure must be notified (prior to its implementation) to the Commission, which will then assess whether the State aid can be approved under other EU State aid rules.

In January 2019 the Commission launched an evaluation of certain State aid rules adopted as part of the 2014 State aid Modernisation package. The evaluation showed that, overall, the State aid control system and rules are fit for purpose. However, it also showed that individual rules needed some adaptation, also in the light of the European Green Deal and the EU's Industrial and Digital Strategies, as well as further streamlining. 

Therefore, to reflect the changes to the various sets of State aid Guidelines, in October 2021 the Commission invited Member States and all other interested parties to comment on certain proposed amendments to the GBER. The proposal followed the amendment of the GBER that the Commission adopted in July 2021 to align the relevant State aid rules with funding rules under the new Multiannual Financial Framework.

Today's amendment will help speeding up investment and financing for clean tech production in Europe, while protecting a level playing field in the Single Market.