28 July 2022

The European Commission adopted an amendment, extending the Temporary Crisis Framework for state aid to make it easier for the Member States to grant aid to companies due to rising energy costs.  

Amendment of the Temporary Crisis Framework  

The amendment presented by the European Commission presents new types of state aid to be granted on a case-by-case basis, subject to conditions:  

  1. Support companies affected by mandatory or voluntary gas restrictions. 
  2. Support for filling gas storage facilities 
  3. Transitional and time-limited support for fuel switch-over to more polluting fossil fuels subject to energy efficiency efforts and to avoid lock-in effects 
  4. Support for the provision of insurance to companies engaged in the transportation of supplies to and from Ukraine. 

REPowerEU 

The Commission seeks to extend the Temporary Crisis Framework with two additional support measures that are aligned with the REPowerEU Plan:  

  • Measures accelerating the deployment of renewable energy: the Member States can set up schemes for investments in renewable energy. Giving special importance to renewable hydrogen, biogas, and biomethane. 
  • Measures to facilitate the decarbonization of industrial processes: the Member States will be able to support investments to phase out fossil fuels through electrification, energy efficiency, and renewable hydrogen.  

This support may be granted until June 30, 2023. 

Value proposition  

The Temporary Crisis Framework considers three types of support for its Member States. Following the approval of the amendment, state aid is distributed as follows:  

  1. Countries may grant limited amounts of aid to companies affected by the energy crisis: The amount of the subsidy will depend on the sector the company is in: 
    • EUR 62,000 per affected company in the agricultural sector
    • 75,000 euros per affected company in the fishing and aquaculture sector. 
    • 500,000 euros per affected company in the rest of the sectors
  2. To ensure that companies have sufficient liquidity: the Member States may provide public and private loans at subsidized interest rates. In addition, subsidized state guarantees will be provided to ensure that banks continue to lend to all companies affected by the crisis. 
  3. Compensate companies for additional costs incurred due to exceptionally high gas and electricity prices: Such aid may be granted in any form, including direct subsidies. The amendment details that the Member States may grant aid to act against rising energy costs, covering up to 70% of the beneficiary’s gas and electricity consumption during the same period of the previous year. 

NextGenerationEU helps the European Union to overcome the damage caused by the coronavirus pandemic, both economically and socially. It is a tool to address the ecological crisis and enables the EU to become greener, more digital, resilient and better prepared for future challenges.   

Diego Gonzalez Armesto 

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