The European Commission has approved a €5 billion (CZK 125 billion) Czech scheme to support large energy producers in the context of Russia's war against Ukraine. The scheme was approved under the State aid Temporary Crisis Framework adopted by the Commission on 23 March 2022, based on Article 107(3)(b) of the Treaty on the Functioning of the European Union ('TFEU'), recognising that the EU economy is experiencing a serious disturbance. Such Temporary Crisis Framework was amended on 20 July 2022 and on 28 October 2022, and replaced by the Temporary Crisis and Transition Framework, adopted by the Commission on 9 March 2023.
The Czech measure
Czechia notified to the Commission, under the Temporary Crisis Framework, a €5 billion (CZK 125 billion) scheme to support large energy producers in the context of Russia's war against Ukraine.
Under this measure, the aid takes the form of subsidised loans. The purpose of the scheme is to help large energy producers to meet the collateral requests in the energy trading markets, with the final aim of supporting the functioning of the markets and the supply of energy to the economy. The scheme has expired on 31 December 2022.
The Commission found that the Czech scheme is in line with the conditions set out in the Temporary Crisis Framework. In particular, the subsidised loans (i) could be granted until 31 December 2022; (ii) cover urgent liquidity needs for working capital purposes, specifically related to the provision of financial collaterals for trading activities on energy markets; (iii) have a maximum maturity of 3 years; and (iii) the interest rates respect the minimum levels set out in the Temporary Crisis Framework.
The Commission concluded that the Czech scheme was 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 Framework. On this basis, the Commission approved the aid measure under EU State aid rules.
Background
The State aid Temporary Crisis Framework, adopted on 23 March 2022, enabled 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 Framework provided for the following types of aid, which could 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.
