RESCUE AND RESTRUCTURING STATE AID GUIDELINES
The European Commission is calling for evidence and consulting until 14 November 2025 on the scope and content of its revision of the Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty. The Guidelines set out conditions under which aid to non-financial undertakings may be considered in line with EU rules. The proposed revision considers expanding the scope of the guidelines, amending the definition of undertaking in difficulty, clarifying elements of the undertaking in difficulty definition, and making technical changes to reflect EU court judgments.
EMISSIONS TRADING SYSTEM STATE AID GUIDELINES
The European Commission is calling for evidence until 5 September 2025 on technical updates to the Emissions Trading System ("ETS") State aid guidelines. Member States can give State aid to certain electro-intensive users to compensate for part of the higher electricity costs due to the ETS. The objective is to minimise carbon leakage (the risk of relocation to third countries with less ambitious climate policies). The aim of the update is to include additional sectors to reflect an increased carbon leakage risk from higher CO2 prices, based on the same method and observable data as are set out in the existing guidelines.
DANISH FOREST PLANTING SCHEME
The European Commission approved a €626 million Danish scheme to support afforestation. The measure is intended to support landowners in transitioning agricultural land into forests through covering the costs of planting and maintaining forests and compensating landowners for forgone agricultural income. The aid will take the form of direct grants to landowners, and the scheme will run until December 2030.
FRENCH OFFSHORE WIND SCHEME
The European Commission approved an €11 billion French scheme to support offshore wind energy in line with the objectives of the Clean Industrial Deal. The measure will support the construction and operation of three offshore wind farms in seas off the French coast. The aid will take the form of monthly variable premiums under a two-way contract for difference which will be calculated by comparing a reference price (to be determined in the tender offer) to a market price for electricity. Where the prices vary, the beneficiaries will receive or be required to pay the difference between the prices. The Commission concluded that the French scheme met the conditions of the Clean Industrial State aid framework and was both necessary and proportionate to accelerate the transition towards the net-zero goal.
SWEDISH CAPACITY MECHANISM
The European Commission has approved a Swedish strategic electricity reserve to safeguard electricity supply in emergency situations. The €300 million reserve is a mechanism that remunerates resources held outside the market and used in cases of emergency when the electricity demand exceeds the available supply. The strategic reserve, which will be in place until 2035, will be open to all projects that can contribute to achieving the security of supply objective, including electricity generation, demand-side response and storage. Projects will need to comply with the CO2 emission limits set out in the Internal Market in Electricity Regulation. The beneficiaries of the aid will be determined through a bidding process and the aid will be subject to safeguards to ensure effective competition. Capacity funded through the measure will not participate in electricity markets for the time in which it is subject to the reserve to limit distortion of competition in the market.
DANISH SUSTAINABLE AVIATION FUEL
The European Commission has approved a €36 million Danish measure aimed at reducing greenhouse gas emissions in the domestic aviation sector. The measure aims to incentivise the use of sustainable aviation fuel ("SAF") for domestic flights. The scheme will support at least 20 weekly flights on at least one domestic air route using 40% SAF from 31 December 2027. The aid will be provided to cover the additional costs linked with the use of SAF and will be subject to a competitive bidding process to ensure cost-effectiveness. This is the first State aid scheme approved by the Commission that promotes the use of SAF.
POLISH STATE AID INVESTIGATION
The European Commission has initiated an investigation into State aid granted by Poland to MAN Trucks Sp for the extension of capacity for an existing factory. In 2024, the Polish authorities notified the Commission of €26 million of aid to MAN Trucks, which operates in a Polish region eligible for regional aid under the EU State aid rules. The aid was granted by Poland but suspended subject to the Commission's approval. On preliminary assessment, the Commission has doubts as to whether the measure is in line with State aid rules. The Commission has initiated an in-depth investigation into whether the measure is in line with the applicable EU State aid rules, in particular with the Guidelines on Regional State aid.
ELECTRIC VEHICLE BATTERY PLANT
The European Commission approved a €264 million Hungarian measure to support Hungary Sunwoda Automotive Energy Technology Kft in setting up an electric vehicle battery plant. The measure, which will take the form of a cash grant and of a tax credit, will support €1.43 billion investment in a greenfield electric vehicle battery plant. The Commission found that the measure will contribute to the economic development, employment and competitiveness of a disadvantaged region. The project will produce lithium-ion battery cells that can power electric vehicles and support the transition to a low-carbon economy.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.
