The European Commission has sent to Member States for consultation a draft proposal to partially adjust the phase-out schedule of the provisions of the State aid Temporary Crisis and Transition Framework aimed at providing a crisis response following Russia's aggression against Ukraine and the unprecedented increase in energy prices.
Since the beginning of Russia's war against Ukraine and in the context of its direct and indirect effects on the EU economy, the State aid Temporary Crisis Framework, adopted on 23 March 2022, has enabled Member States to provide timely, targeted and proportionate support to businesses in need. The Framework has allowed Member States to act quickly and effectively to help companies affected by the significant economic uncertainties, disrupted trade flows and supply chains, and the exceptionally large and unexpected price increases, in particular of natural gas, electricity, numerous other input and raw materials, and primary goods. Those effects taken together had caused a serious disturbance in the economy of all Member States across a wide range of economic sectors.
On 9 March 2023, the Commission adopted the Temporary Crisis and Transition Framework, which amended and prolonged in part the Temporary Crisis Framework, and fosters support measures in sectors which are key for the transition to a net-zero economy, in line with the Green Deal Industrial Plan.
As Russia's war of aggression against Ukraine continues, the EU's economic situation is showing resilience in the face of the shocks it has endured. The Commission's Summer 2023 Economic Forecast notes that the EU economy continues to grow, albeit with reduced momentum. The situation in the energy markets and in particular gas and average electricity prices seem to have stabilised. In addition, the risks of energy supply shortages have receded, among other things due to the measures taken by Member States to diversify energy sources. At the same time, the Summer 2023 Economic Forecast notes that Russia's ongoing war against Ukraine and wider geopolitical tensions, in particular in the Middle East, continue to pose risks and remain a source of uncertainty.
Against this background, the Commission is proposing a limited prolongation of 3 months of the provisions enabling Member States to continue to grant limited amounts of aid (section 2.1 of the Framework) and aid to compensate for high energy prices (section 2.4 of the Framework), until 31 March 2024. This will allow Member States, where needed, to extend their support schemes and ensure that companies still affected by the crisis will not be cut off from necessary support in the upcoming winter heating period. Under section 2.4 of the Framework, Member States may continue to provide support by covering parts of additional energy costs only as far as the energy prices significantly exceed pre-crisis levels.
The Commission's draft proposal sent to Member States today does not affect the remaining provisions of the Temporary Crisis and Transition Framework. The other crisis-related sections of the Framework (i.e. liquidity support in form of State guarantees and subsidised loans, and measures aimed at supporting electricity demand reduction) will not be extended beyond their current expiry date, which is 31 December 2023. The sections aimed at accelerating the green transition and reducing fuel dependencies are not affected by the draft proposal and will remain available based on the current Framework until 31 December 2025.
Member States now have the possibility to comment on the Commission's draft proposal. The Commission intends to adopt the limited amendment to the Temporary Crisis and Transition Framework in the coming weeks, taking into account the feedback received from the Member States.
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 was amended on 20 July 2022 to complement the Winter Preparedness 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.
On 9 March 2023, the Commission adopted the current 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.
The Temporary Crisis and Transition Framework, as currently in force, provides for the following types of aid, which can be granted by Member States:
- Limited amounts of aid (section 2.1), in any form, for companies affected by the current crisis or by the subsequent sanctions and countersanctions up to €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 (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;
