EU loosens state aid rules for green technologies


On March. 9, 2023, the European Commission amended the Temporary Crisis and Transition Framework (TCTF), which it had adopted to support the economy in the context of Russia's war against Ukraine.

“Together with the amendment to the General Block Exemption Regulation (GBER) that the Commission endorsed today, the Temporary Crisis and Transition Framework will help speeding up investment and financing for clean tech production in Europe,” the EC said in a statement.

The new provisions are expected to enable member states to implement support programs for renewable energy and energy storage that are running until the end of 2025 by simplifying the conditions for the granting of aid to small projects and less mature technologies, as well as by reducing the need for competitive auctions.

The new rules should help deploy all types of renewable energy sources, including industrial processes switching to hydrogen-derived fuels, and define higher aid ceilings and calculations.

Moreover, the framework should enable investment support for the manufacturing of batteries, solar panels, wind turbines, heat pumps, electrolyzers and carbon capture technologies. “Member States may grant even higher percentages of the investment costs if the aid is provided via tax advantages, loans or guarantees,” the EC said. “Before granting the aid, national authorities must nevertheless verify the concrete risks of the productive investment not taking place within the European Economic Area and that there is no risk of provoking relocation within the single market.”

The European Solar Manufacturing Council (ESMC) said the new framework will be the basis of Europe's future manufacturing ecosystem.

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“ESMC highly welcomes the proposals of the European Commission, but still expresses doubts about the practical efficiency of the proposed State aid exemptions, due to the comparatively low aid intensity and rather complicated process to achieve higher support for individual companies,” the association said in a statement.

“ESMC’s position is that the risk of provoking relocation within the single market should not be overestimated, hence the bigger issue is that the global PV manufacturing race in the forthcoming months and years is being severely underestimated.”

According to the ESMC, member states will be allowed to support PV manufacturing industry by 15% to 35% of capital expenditures for large enterprises and by 35% to 55% for small enterprises by 35% to 55%. “The support through tax advantages, loans or guarantees large enterprises would be feasible by 20% to 40% for large enterprises (for medium enterprises by 30% to 50%, for small enterprises by 40% to 60%) depending on the economic development area,” it further explained.


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