PRODUCTION PROCESS DECARBONISATION
The European Commission approved a €5 billion German scheme to help companies subject to the EU Emission Trading Scheme to decarbonise their production processes. The scheme was found to be necessary and appropriate to support decarbonisation. The scheme was also held to have an incentive effect as the beneficiaries would not carry out investments in decarbonisation to the same extent without the public support.
ARBITRATION AWARD INCOMPATIBLE WITH STATE AID RULES
The European Commission concluded that an arbitration award, in which Spain is ordered to pay compensation for the modification of a renewable electricity support measure, constitutes illegal State aid within the meaning of Article 107(1) of the Treaty on the Functioning of the European Union. The decision requires Spain not to pay any compensation based on the arbitration award, and to ensure that no payment, execution, or implementation of the arbitration award otherwise takes place.
STRATEGIC SECTORS
The European Commission approved a €960 million Czech scheme to support investments in strategic sectors to foster the transition to a net-zero economy. The scheme contributes to the achievement of the priorities of the European Commission for 2024-2029, based on the Political Guidelines, which call for investments in clean energy and technologies. The Commission found that the scheme is in line with the conditions set out in the State aid Temporary Crisis and Transition Framework. The Commission further stated that the scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of the Clean Industrial Deal.
RENEWABLE HYDROGEN PRODUCTION
The European Commission approved, under EU State aid rules, a €400 million Austrian State aid scheme, and a €36 million Lithuanian State aid scheme, to support the production of renewable hydrogen through the European Hydrogen Bank's "Auctions-as-a-Service" tool for the auction closing in 2025. The scheme was found to be permissible under State Aid rules on the basis that it would bring positive effects and has an incentive effect with limited impact on competition and trade. The Commission further stated that the scheme is necessary and appropriate to facilitate the production of renewable hydrogen and thus decarbonisation of the industrial, transport and/or energy sectors. The European Commission also approved a €400 million Spanish scheme to support renewable hydrogen production.
REINSURANCE
The European Commission approved a €1.5 billion Polish scheme to provide State-supported reinsurance of insurance for transport on the territory of Ukraine. Direct beneficiaries will be companies authorised to provide insurance services in Poland. Indirect beneficiaries will be transport companies authorised to provide services in Poland and delivering goods on the territory of Ukraine.
STATE AID SCOREBOARD
The European Commission published an overview of State aid spending in the EU in 2023. Environmental protection and energy savings are the policy objectives on which Member States spent the most (€55.32 billion, accounting for around 30% of overall State aid expenditure).
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.
