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European Commission Consulting Member States on Proposal to Amend State Aid Temporary Crisis Framework — Orbitax Tax News & Alerts

The European Commission has issued a release announcing that it is consulting Member States on amendments to the Temporary Crisis Framework adopted on 23 March 2022 to support the economy in the context of Russia's invasion of Ukraine.


Russian invasion of Ukraine: Commission consults Member States on proposal to amend State aid Temporary Crisis Framework

The European Commission has sent to Member States for consultation a draft proposal to adjust the State aid Temporary Crisis Framework, initially adopted on 23 March 2022 to support the economy in the context of Russia's invasion of Ukraine.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "Russia's unjustified military aggression against Ukraine continues. So does its impact on Ukrainians and also on our EU economy. This is why we are proposing to adjust the Temporary Crisis Framework so that it reflects and supports the important and urgent REPowerEU Plan objectives of accelerating the diversification of energy supplies to become independent from fossil fuels even more quickly. As the crisis persists, we are also proposing to increase the maximum level of aid that can be granted under the Framework. We will decide on the way forward taking into account the views of all Member States and the need to preserve effective competition in the Single Market."

In view of the prolonged invasion by Russia of Ukraine and of its direct and indirect effects on the economy and on the energy situation, the Commission is assessing the need to adjust the State aid Temporary Crisis Framework. The proposal sent to Member States today also takes into consideration the EU goal of becoming independent from fossil fuels. Among others, the Commission is consulting Member States on possible amendments relating to:

  • The adjustment of maximum aid ceilings foreseen in the provisions on limited amounts of aid, which allow Member States to provide direct grants or other forms of aid to companies in any sector affected by the crisis, including agriculture and fisheries;
  • The need for additional measures, facilitating the investments in renewable energy, including renewable hydrogen, biogas and biomethane, storage and renewable heat, including through heat pumps, in line with the REPowerEU Plan. This amendment would enable Member States to set up schemes with simplified tender procedures that can be quickly implemented, while including sufficient safeguards to protect the level playing field. In particular, Member States would be able to devise schemes for a specific technology, requiring support in view of the particular national energy mix; and
  • The need for additional measures to further accelerate the diversification of energy supplies, reducing the dependency on imported fossil fuels by supporting energy efficiency measures and measures to decarbonise industrial processes. This amendment would enable Member States to either (i) set up new tender based schemes, or (ii) directly support projects, without tenders, with certain limits on the share of public support per investment. Specific top-up bonuses would be foreseen for small and medium sized enterprises as well as for particularly energy efficient solutions.

Under both new sections, Member States would need to ensure that the projects are implemented within a specific timeline, to ensure an effective acceleration effect in reaching the REPowerEU objectives.

Member States now have the possibility to comment on the Commission's draft proposal.