Green Forum • 27 May, 2024 at 9:00 AM
The European Commission has approved a €4 billion French State aid scheme designed to support the decarbonization of the manufacturing sector and facilitate its transition to a net-zero economy, in alignment with the Green Deal Industrial Plan.
This scheme was approved under the State Aid Temporary Crisis and Transition Framework, which was adopted on 9 March 2023 and amended on 20 November 2023 and 2 May 2024.
France notified the Commission of a €4 billion scheme under the Temporary Crisis and Transition Framework, aimed at supporting investments in:
* Electrification of industrial processes.
* Energy efficiency improvements.
The scheme will provide direct grants covering up to 30% of project investment costs to companies in the manufacturing sector in France. Eligible electrification projects must achieve at least a 40% reduction in greenhouse gas emissions from industrial processes compared to current levels. Energy efficiency projects must reduce energy consumption in industrial processes by at least 20% compared to today. For activities covered by the EU Emission Trading System (ETS), emissions reductions must fall below the relevant ETS benchmarks at the time the aid is granted.
The Commission determined that the scheme complies with the conditions of the Temporary Crisis and Transition Framework. Specifically:
* Aid per beneficiary will not exceed 10% of the total budget (€400 million).
* Aid will be granted no later than 31 December 2025.
* Investments must be completed within 36 months after aid is granted.
* Conditions will ensure actual emissions reductions, and the aid will not allow beneficiaries to increase production capacity by more than 2%.
The Commission concluded that the French scheme is necessary, appropriate, and proportionate for accelerating the green transition and supporting economic activities critical to the REPower EU Plan and the Green Deal Industrial Plan. This is in line with Article 107(3)(c) TFEU and the Temporary Crisis and Transition Framework.
On this basis, the Commission approved the aid measure under EU State aid rules.