The European Commission has approved a €2.9 billion French scheme for supporting investment in green industries (tax credit for investment in green industries) to foster the transition towards a net-zero economy, in line with the Green Deal Industrial Plan. The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on 9 March 2023 and amended on 20 November 2023, to support measures in sectors which are crucial for accelerating the green transition and reducing fossil fuel dependencies.
The French measure
France has notified to the Commission, under the Temporary Crisis and Transition Framework, a €2.9 billion scheme for supporting investment in green industries to foster the transition to a net-zero economy.
Under this measure, the aid will take the form of a tax credit. The measure will be open to companies which plan projects to invest in the production of solar panels, batteries, wind turbines and heat pumps, as well as key components for producing this equipment and critical materials required for their production.
The Commission found that the French scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework, in particular (i) the aid is expected to encourage the production of strategic equipment for the transition to a net-zero economy; ii) the amount of aid per beneficiary will not exceed the ceilings set out in the Temporary Crisis and Transition Framework; and (iii) it will be granted until 31 December 2025 at the latest.
The Commission concluded that the French scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of the REPowerEU Plan and the Green Deal Industrial Plan, in line with Article 107( 3)(c) 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 key sectors for the transition to a net-zero economy, in line with the Green Deal Industrial Plan. The Temporary Crisis and Transition Framework helps to speed up investment and financing for the production of clean technologies in Europe. It also assists Member States in delivering on specific projects under National Recovery and Resilience Plans which fall within their scope.
The Temporary Crisis and Transition Framework was amended on 20 November 2023 to prolong by six months a limited number of sections aimed at providing a response to the crisis stemming from Russia's aggression against Ukraine and the unprecedented increase in energy prices.
The Temporary Crisis and Transition Framework, as amended, provides for the following types of aid, which can be granted by Member States:
- limited amounts of aid (section 2.1), in any form and granted until 30 June 2024, for companies affected by the current crisis or by the subsequent sanctions and countersanctions up to €280,000 and €335,000 respectively in the agriculture, and fisheries and aquaculture sectors, and up to €2.25 million in all other sectors;
- liquidity support in form of State guarantees and subsidised loans (sections 2.2 and 2.3). 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. These sections are applicable only until 31 December 2023 and have not been amended;
