The European Commission has opened an in-depth investigation to assess whether investment aid that Poland granted to MAN Trucks Sp. z o. o. ('MAN Trucks') for extending the capacity of its existing factory in Niepołomice is in line with EU State aid rules.
MAN Trucks, a manufacturer of light/mid-weight and heavy trucks, is part of the MAN Group and the Volkswagen Group.
The Commission investigation
In 2024, the Polish authorities notified to the Commission aid of around €26 million (PLN 116 million) for extending the capacity of MAN Trucks' factory in Niepołomice, in the Malopolskie region of Poland, which is a region eligible for regional aid under EU State aid rules. The investment is expected to create about 1 400 new jobs in the region.
The aid consists of a direct grant of around €2.4 million (around PLN 10.7 million) and a corporate income tax exemption of around €23.7 million (around PLN 105.6 million). Poland has decided to grant the aid but has suspended it until the Commission's approval.
The Commission has to assess whether the positive effects of the aid outweigh its negative effects on competition. At this stage, based on a preliminary assessment, the Commission has found that the investment project facilitates the economic development and employment in a less advantaged region of the EU. Nevertheless, the Commission has doubts as to whether the measure is in line with the applicable EU State aid rules, in particular with the Guidelines on Regional State aid .
The Commission has therefore decided to open an in-depth investigation to assess whether:
- the aid is proportionate, meaning that it is limited to what is necessary to attract the investment to the disadvantaged region;
- the aid has an "incentive effect". In that respect, the Commission will investigate whether the decision to extend the capacity of the existing MAN Trucks plant in Poland was directly triggered by the Polish aid or whether it would have been carried out in that area even without the aid.
The Commission will now investigate further to determine whether any of these doubts are confirmed. The opening of an in-depth investigation gives Poland and interested third parties, including the beneficiary of the aid, the opportunity to submit comments. It does not prejudge the outcome of the investigation.
Background
EU State aid rules, in particular the Commission's Regional State Aid Guidelines ('RAG'), enable Member States to support the economic development and employment in the EU's less developed regions and to foster regional cohesion in the Single Market. The RAG set out the rules under which Member States can grant State aid to companies to support investments in new production facilities in the less advantaged regions of Europe.
To comply with the RAG, an aid measure must respect several conditions:
- The aid must have a real "incentive effect", meaning it must effectively encourage the beneficiary to invest in a specific region;
- the aid must not exceed the regional aid ceiling applicable to the respective region and must be kept to the minimum necessary to attract the investment to the region;
- the aid must not have undue negative effects, such as the creation of excess capacity in a declining market;
- the aid must not directly cause the relocation of existing or closed down activities from elsewhere in the EU to the aided establishment; and
- the aid must not divert investment away from another region in the EU, which is as or more economically disadvantaged than the region where the aided investment takes place.
