New Temporary State Aid Framework Throws A Lifeline To Sectors Hit By The Middle East Crisis

What You Need to Know

Key takeaway #1

The European Commission adopted a new temporary framework relaxing the conditions under which EU Member States can grant State aid to companies in sectors hit hardest by the ongoing crisis in the Middle East.

Key takeaway #2

The framework applies to aid granted by 31 December 2026 to companies active in agriculture, fisheries, land transport, sea shipping, and energy-intensive industries. However, the aviation industry is excluded.

Key takeaway #3

The Commission has also indicated its willingness to assess, on a case-by-case basis and subject to several requirements, additional transitory measures aimed at mitigating the impact of high gas prices on electricity generation.

On 29 April 2026, the European Commission adopted the Middle East Crisis Temporary State Aid Framework (METSAF), a temporary framework relaxing the conditions under which EU Member States can support companies in sectors particularly affected by fuel, fertilizer, and electricity price surges driven by the Middle East crisis.

Since February 2026, escalating tensions in Iran and the wider Middle East region have de facto closed the Strait of Hormuz, significantly driving up global oil, gas and fertilizer prices. Given the close correlation between gas and electricity prices, power costs have risen correspondingly. The METSAF was adopted in response, providing Member States with additional tools to protect their national economies in the most affected sectors. It is the EC's third "temporary framework" to date, following similar measures introduced during the COVID-19 pandemic (2020, see our previous alert) and in response to Russia's aggression against Ukraine (2022, see our previous alert).

1. Sectors covered 

The METSAF temporarily complements existing State aid instruments to address the effects of the crisis in five sectors considered to be particularly exposed to fuel, fertilizer and electricity price surges:

• Agriculture
• Fisheries and aquaculture
• Land transport (rail, road, and inland waterways)
• Intra-EU short sea shipping
• Energy-intensive industries

Remarkably, the aviation sector is explicitly excluded. The EC considers existing aviation-specific State aid rules sufficient to address the impact of the current crisis.

2. Temporary State aid measures 

In the agricultural, fishery,and transport sectors, the framework allows for the following:

• Aid to cover part of the price increases of fuel and fertilizers: Member States may compensate companies for up to 70% of extra costs attributable to fuel and fertilizer price increases caused by the crisis. These extra costs are determined by comparing current market benchmark prices against a historical benchmark and applying the resulting difference to the company's current (or most recent pre-crisis) consumption volumes. For aid in the form of repayable instruments (such as a loan), an aid intensity of up to 100% is allowed provided the aid is not convertible into a grant.
• Simplified option for small amounts of aid: A simplified route is available for aid amounts of up to €50,000. Under this approach, aid may be calculated on the basis of proxies — such as the size and type of a firm's activities or estimated sector fuel use — rather than requiring detailed consumption evidence.

For energy-intensive industries eligible for temporary electricity price relief under section 4.5 of the Clean Industrial Deal State Aid Framework (CISAF, see our previous alert), the METSAF enables Member States to increase the aid intensity from 50% to a maximum of 70% of eligible electricity consumption costs. This can cover up to 50% of the total consumption of the beneficiary. No additional decarbonization efforts are required. In addition, partial cumulation with State aid granted under the ETS State aid guidelines is permitted.

3. Other tools 

The Commission encourages Member States to consider transitory measures to mitigate the impact of high gas prices on electricity generation, such as temporary reductions in fuel excise duties under the Energy Taxation Directive, which are in principle exempt from the standard notification requirement.

The Commission indicates that it stands ready to assess, on a case-by-case basis, temporary measures to mitigate the impact of high gas prices on electricity generation. These measures may include subsidizing the fuel cost of gas-fired power plants to reduce overall electricity costs, subject to several requirements including safeguards to avoid market distortions and ensure pass-through of the benefits to final consumers.

4. Period of application and process

State aid measures under the METSAF must be notified to, and approved by, the Commission before aid can be granted. The EC has made a promising yet perhaps ambitious commitment to a fast-track approval process. It is important to note that the METSAF does not replace existing State aid rules — it merely provides an additional layer of temporary flexibility. Member States can thus continue to make use of the existing State aid toolkit, including the Agricultural Block Exemption Regulation, the Fishery Block Exemption Regulation, the Guidelines on State aid to the maritime sector, the General Block Exemption Regulation, and de minimis rules.

The METSAF applies to aid granted from 1 March 2026 until 31 December 2026. However, where a Member State opts for ex post verification of supporting documentation (i.e., without granting advance payments), aid may be granted until 31 March 2027, provided that the eligible period from 1 March to 31 December 2026 is respected.