EU Geopolitical Risk Update - Key Policy & Regulatory Developments No. 127

 European Commission publishes 2025 Report on Competition Policy (see here)

European Commission publishes Middle East Crisis Temporary State Aid Framework (see here)

On 5 May 2026, the Commission published the 2025 Report on Competition Policy, setting out main legislative initiatives, policy developments, and enforcement actions in the competition field. The Report opens by highlighting the challenges and deep uncertainties the EU claims to face, driven by what it describes as sudden geopolitical shifts, significant technology shifts, and climate change.

The Report, in particular, sets out the Commission’s stated efforts to protect competition and the innovative capacity of EU companies, while contributing to EU resilience and meeting the objectives of the green and digital transitions through initiatives such as the following:

• The Commission adopted the Clean Industrial Deal State Aid Framework (CISAF) in June 2025, designed to facilitate the EU’s clean transition in view of making the EU a key global player in stateof-the-art clean technologies, while avoiding fragmenting the Single Market.
  
  CISAF sets out to simplify the State aid rules across targeted areas (e.g., roll-out of clean energy and low-carbon fuels; temporary electricity price relief for energy-intensive users; decarbonization of existing production facilities; development of clean tech manufacturing capacity in the EU; measures to stimulate demand for clean technology products; and de-risking of investments related to the objectives of the Commission’s Clean Industrial Deal of February 2025).
  
  By end-2025, the Commission had adopted eight decisions approving nine national measures notified by five Member States with a total amount of €18.4 billion (e.g., authorizing France to invest €11 billion to accelerate the use of renewable energy; and approving national schemes totalling €6.7 billion toward building sufficient manufacturing capacity in clean technologies).
  
  
• The Foreign Subsidies Regulation of December 2022 is stated as having contributed to countering anti-competitive and marketdistortive activities by firms active in the EU that receive subsidies from outside the EU. In 2025, the Commission consulted stakeholders on the then-draft FSR Guidelines, on improving predictability and transparency for companies by clarifying key concepts, such as how the Commission concludes whether a foreign subsidy has caused a distortion of competition and when a transaction that falls below the FSR’s mandatory filing thresholds should be called in (subsequently, on 9 January 2026, the Commission published FSR Guidelines (see Jones Day EU Geopolitical Update No. 126 of 19 March 2026).
  
  On FSR enforcement in 2025, the Commission notably made ADNOC’s offered commitments legally binding in its acquisition of Covestro; conducted one unannounced inspection under the FSR at the premises of a company active in the e-commerce sector; and continued work on its preliminary review in the wind energy sector.
  
  
• The Commission’s other enforcement activities in 2025 also notably included cartels, with a settlement involving fines of €329 million for Delivery Hero and Glovo in online food and grocery deliveries and €72 million in a cartel decision for three automotive starter battery manufacturers and the trade association Eurobat.

The accompanying Staff Working Document provides a comprehensive account of policy developments and enforcement, including by sector, in the competition field. The Commission also released an infographic, which traces the year’s key competition developments.

On 5 May 2026, the Commission published its Communication on a Middle East Crisis Temporary State Aid Framework (METSAF) to enable targeted support to the EU economy in response to the impact of the Middle East crisis.

The METSAF seeks to allow Member States to act swiftly to shield the most exposed companies in key sectors by providing for, e.g.:

• Aid based on actual consumption in agriculture, fishery, land transport, and intra-EU short sea shipping, enabling Member States to compensate up to 70% of a beneficiary’s extra costs due to the price increase of fuel and fertilizer caused by the crisis. 
• A simplified approach for small amounts of aid, allowing Member States to calibrate individual aid amounts on elements such as the size and type of beneficiaries’ activities, a general estimate of fuel consumption in the sector (or other relevant proxies), with each beneficiary able to receive up to €50,000. 
• For eligible energy-intensive industries, a temporary adjustment to the Clean Industrial Deal State Aid Framework (CISAF, as also discussed above / below), allowing further flexibility and higher aid intensities to address electricity price spikes. Aid intensity can increase from 50% to up to 70% for the electricity cost of eligible consumption.

Measures under the METSAF must be notified to the Commission, and the framework aims to allow for a rapid approval process.

Among the most recently approved State aid schemes under the METSAF (up to 21 June 2026):

• €85 million Irish State aid for agricultural companies facing increased fuel prices due to the Middle East crisis. 
• €8 million Croatian State aid for fishing companies facing increased fuel prices due to the Middle East crisis. 
• €25 million Spanish State aid for fishing companies facing increased fuel prices due to the Middle East crisis. 
• €54 million Spanish State aid for agricultural companies facing increased fuel prices due to the Middle East crisis. 
• €500 million Spanish State aid for agricultural companies facing increased fertilizer prices due to the Middle East crisis. 
• €15 million French State aid for agricultural and aquaculture companies facing increased fuel prices due to the Middle East crisis. 
• €13 million French State aid for fishing companies facing increased fuel prices due to the Middle East crisis.

Looking ahead. The METSAF will be in place until 31 December 2026, and the Commission will keep the content, scope and duration under review in the light of developments in the Middle East and in the general economic situation.

Additionally, in responding to the Middle East crisis, Member States can continue relying on specific State aid rules applicable to sectors covered by the METSAF, e.g., for agriculture, Guidelines for State aid in the agricultural and forestry sectors and in rural areas; for fishery, Guidelines for State aid in the fishery and aquaculture sector; for road and maritime transport, Guidelines on State aid to maritime transport.