The European Commission adopted, on Friday 28 October, an amendment to the Temporary Framework for State aid to allow Member States to continue to use the flexibility provided by the State aid rules to support the economy in the context of Russia’s war against Ukraine.
The Temporary Crisis Framework was adopted on 23 March 2022 and amended for the first time on 20 July. The Temporary Crisis Framework measures are prolonged until 31 December 2023.
There will be an increase in the ceilings set out for limited amounts of aid up to the amount of €250,000 and €300,000 for companies active in the agriculture, and fisheries and aquaculture sectors, respectively, and up to €2 million for companies active in all other sectors.
The new framework:
- introduces additional flexibility for liquidity support to energy utilities for their trading activities. In exceptional cases and subject to strict safeguards, Member States may provide public guarantees exceeding 90% coverage, where they are provided as financial collateral to central counterparties or clearing members;
- increases flexibility and support possibilities for companies affected by rising energy costs, subject to safeguards. Member States will be entitled to calculate support based on either past or present consumption, taking into account the need to keep intact market incentives to reduce energy consumption and to ensure the continuity of economic activities. In addition, Member States will be able to provide support more flexibly, including to particularly affected energy-intensive sectors, subject to safeguards to avoid overcompensation. For companies receiving larger amounts of aid, the Temporary Crisis Framework foresees commitments to set a path towards reducing the carbon footprint of energy consumption and implementing energy efficiency measures;
- introduces new measures aimed at supporting electricity demand reduction.
Finally, the criteria for assessing recapitalisation support measures are clarified.
The Executive Vice-President responsible for Competition Policy, Margrethe Vestager says that the war in Ukraine is having a serious impact on the European economy. “All European households and businesses face extraordinary increases of energy costs. In this context, the Temporary Crisis Framework provides a horizontal tool enabling Member States to support those that need it, using the full flexibility of State aid rules, while preserving a level playing field in the Single Market”.
Link to the new framework: https://aeur.eu/f/3u7 (Original version in French by Lionel Changeur)