The European Commission has approved a €2.6 billion (SEK 29 billion) Swedish scheme to support companies active in southern Sweden 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 Swedish measure
Sweden notified to the Commission, under the Temporary Crisis and Transition Framework, a €2.6 billion (SEK 29 billion) scheme to support companies in southern Sweden facing increased energy costs in the context of Russia's war against Ukraine.
The scheme will be open to companies of all sizes and sectors active in southern Sweden, with the exception of financial companies.
Under this measure, the aid will take the form of direct grants. The individual aid amount will be calculated by multiplying the historical annual electricity consumption of the company by a fixed rebate per kWh of electricity consumed.
The measure will be financed from 'congestion income', i.e. the income obtained by the Swedish Transmission System Operator ('TSO') as result of electricity trade flows across different electricity price areas due to crisis-related high price differences between such areas. The Swedish Tax Authority will be responsible for the administration of the scheme.
The Commission found that the Swedish scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework. In particular, the aid (i) will not exceed €250,000 per company active in the primary production of agricultural products, €300,000 per company active in the fishery and aquaculture sectors and €2 million per company active in all other sectors; (ii) will only be granted to companies affected by the crisis; and (iii) will be granted before 31 December 2023.
The Commission concluded that the Swedish 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 measure 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.
