The European Commission has granted approval to a €3 billion German scheme aimed at supporting private investments in specific strategic goods essential for fostering the transition to a net-zero economy, aligning with the Green Deal Industrial Plan. This scheme falls under the State aid Temporary Crisis and Transition Framework, which was adopted on March 9, 2023, to support measures in sectors crucial for accelerating the green transition and reducing fuel dependencies. The Temporary Crisis and Transition Framework, an amendment and extension of the Temporary Crisis Framework, allows Member States to provide economic support in the context of the current geopolitical crisis. The Temporary Crisis Framework was previously amended on July 20, 2022, and October 28, 2022.
Under the German measure, companies producing relevant equipment, such as batteries, solar panels, wind turbines, heat pumps, electrolysers, equipment for carbon capture usage and storage, as well as key components for their production or related critical raw materials, will have access to aid in the form of direct grants, tax advantages, subsidised interest rates on new loans, or guarantees on new loans.
The European Commission determined that the German scheme complies with the conditions outlined in the Temporary Crisis and Transition Framework. The aid will incentivize the production of relevant equipment for the net-zero transition and must be granted by December 31, 2025. The Commission concluded that the German scheme is necessary, appropriate, and proportionate to accelerate the green transition and facilitate the development of key economic activities in line with the Green Deal Industrial Plan.
This approval was granted under EU State aid rules.
Background:
On March 9, 2023, the Commission adopted the Temporary Crisis and Transition Framework, along with the amendment to the General Block Exemption Regulation. These measures aim to expedite investment and financing for clean tech production in Europe and assist Member States in implementing projects under their National Recovery and Resilience Plans. The Temporary Crisis and Transition Framework offers support in sectors vital to achieving a net-zero economy and is an amendment and extension of the Temporary Crisis Framework, which allows Member States to provide economic support in response to Russia’s war against Ukraine. The Temporary Crisis Framework has been amended on various occasions to address different objectives.
The Temporary Crisis and Transition Framework provides various types of aid that Member States can grant, including limited amounts of aid for companies affected by the crisis or sanctions, liquidity support in the form of state guarantees and subsidised loans, compensation for high energy prices, measures to accelerate the rollout of renewable energy, measures to facilitate the decarbonisation of industrial processes, measures to support electricity demand reduction, and measures to support investments in key sectors for the net-zero transition.
Sanctioned Russian-controlled entities are excluded from these measures. Measures focused on accelerating the green transition and reducing fuel dependencies will be in place until December 31, 2025, while other provisions will remain applicable until December 31, 2023. The Commission will assess the potential need for extensions at a later stage.
For more information on the Temporary Crisis and Transition Framework and other actions taken by the Commission to address the economic impact of Russia’s war against Ukraine and promote the transition to a net-zero economy, visit the Commission’s website.
https://ec.europa.eu/commission/presscorner/detail/en/IP_23_3779