The European Commission has approved a €1 billion Finnish scheme to support companies in the context of Russia's war against Ukraine. The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on 9 March 2023 to support measures in sectors which are key to accelerate the green transition and reduce fuel dependencies. The new Framework amends and prolongs in part the Temporary Crisis Framework, adopted on 23 March 2022 to enable Member States to support the economy in the context of the current geopolitical crisis, already amended on 20 July 2022 and on 28 October 2022.
The Finnish support measures
Finland notified to the Commission, under the Temporary Crisis and Transition Framework, a €1 billion scheme to support companies in the context of Russia's war against Ukraine.
The scheme consists of two measures: (i) limited amounts of aid in the form of direct grants to eligible beneficiaries, channelled through electricity suppliers, to offset part of these beneficiaries' monthly electricity bills, with a total budget of €400 million; and (ii) liquidity support, in the form of guaranteed loans for electricity suppliers, to enable delayed payments of electricity bills, with a total budget of €600 million.
Under the first measure, managed by the State Treasury, the eligible beneficiaries will be entitled to receive a maximum individual aid amount of €250,000. Households can also benefit from this measure. Support to households, however, does not constitute State aid within the meaning of EU law and therefore does not fall under the Commission's State aid assessment of a given measure.
Under the second measure, the guaranteed loans provided by the State Treasury will help electricity suppliers that are currently facing liquidity shortages as a consequence of the extension granted to customers for the payment of electricity bills.
The Commission found that the Finnish scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework. In particular, for the limited amounts of aid related to the offsetting of electricity bills, the support will not exceed €2 million per beneficiary. For guaranteed loans to electricity suppliers, (i) the guarantees will not exceed six years; (ii) the guarantees relate only to working capital loans; and (iii) the guarantee premiums respect the minimum levels set out in the Temporary Crisis and Transition Framework. In addition, both types of public support will come subject to conditions to limit undue distortions of competition, including safeguards aimed at ensuring that the advantages of the measure are passed on to the largest extent possible to the final beneficiaries. Under both measures, the aid will be granted no later than 31 December 2023.
The Commission therefore concluded that the Finnish scheme is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Crisis and Transition Framework.
On this basis, the Commission approved the aid measures under EU State aid rules.
Background
On 9 March 2023, the Commission adopted a new Temporary Crisis and Transition Framework to foster support measures in sectors which are key for the transition to a net-zero economy, in line with the Green Deal Industrial Plan. Together with the amendment to the General Block Exemption Regulation ('GBER') that the Commission endorsed on the same day, the Temporary Crisis and Transition Framework will help speeding up investment and financing for clean tech production in Europe. It will also assist Member States in delivering on specific projects under National Recovery and Resilience Plans which fall within their scope.
The new Framework amends and prolongs in part the Temporary Crisis Framework, adopted on 23 March 2022, to enable Member States to use the flexibility foreseen under State aid rules to support the economy in the context of Russia's war against Ukraine. The Temporary Crisis Framework has been amended on 20 July 2022, to complement the Safe gas for a Safe Winter Package and in line with the REPowerEU Plan objectives. The Temporary Crisis Framework has been further amended on 28 October 2022 in line with the Regulation on an emergency intervention to address high energy prices and the Regulation enhancing solidarity through better coordination of gas purchases, reliable price benchmarks and exchanges of gas across borders.
The Temporary Crisis and Transition Framework provides for the following types of aid, which can be granted by Member States:
- Limited amounts of aid, in any form, for companies affected by the current crisis or by the subsequent sanctions and countersanctions up to the increased amount of €250,000 and €300,000 in the agriculture, and fisheries and aquaculture sectors respectively, and up to €2 million in all other sectors;
- Liquidity support in form of State guarantees and subsidised loans. In exceptional cases and subject to strict safeguards, Member States may provide to energy utilities for their trading activities public guarantees exceeding 90% coverage, where they are provided as unfunded financial collateral to central counterparties or clearing members.
