State aid: Temporary Crisis and Transition Framework extended

The European Commission has adjusted the timetable for phasing out the provisions of the State aid Temporary Crisis and Transition Framework after sending Member States this proposal for partial adjustment of the timetable for consultation in order to respond to the crisis following Russia's aggression against Ukraine and the unprecedented rise in energy prices.

On 23 March 2022, the Commission adopted the State aid Temporary Crisis Framework to enable Member States to act quickly and effectively in adopting aid measures in favour of companies affected by the considerable economic uncertainties, the disruption to trade flows and supply chains, and the exceptionally sharp and unexpected price rises that have caused serious disruption to the economies of all Member States across a wide range of economic sectors. It was due to run until 31 December 2022.

On 9 March 2023, the Commission amended this temporary framework to extend the categories of aid covered and to extend part of the temporary crisis framework until 31 December 2023, while introducing new measures until 31 December 2025. Within this framework, the Commission's aim was to encourage State support measures in sectors essential to the transition to a net-zero-emissions economy, in line with the Green Pact's industrial plan.

According to the Commission, the summer 2023 economic forecasts show that energy markets appear to have stabilised, the risks of energy supply shortages have diminished and the EU economy continues to grow, albeit at a slower pace.

However, the Commission has noted that geopolitical tensions in the Middle East and Russia's war against Ukraine continue to present risks to energy supply and price stability and remain a source of uncertainty.

Therefore, in this geopolitical context, the Commission has proposed extending until 31 March 2024 certain provisions that allow Member States to continue granting limited amounts of aid and aid for high energy prices to ensure that companies still affected by the crisis receive the necessary support during the next winter heating period.

The other sections of the Framework will not be extended and are due to expire on 31 December 2023. The proposal does not affect the provisions of the Framework that allow Member States to provide additional support to accelerate the investments needed to achieve "net zero" targets, which remain in place until the end of 2025.

On 20 November 2023, following feedback from Member States in a survey and consultation (conducted on 20 July and 6 November 2023 respectively) on its draft proposal, the Commission adopted the amendment to the State aid Temporary crisis and Transition Framework that allows Member States to grant:

1. limited amounts of aid (section 2.1 of the Framework): this section will be extended by six months, until 30 June 2024. The ceilings for limited amounts of aid are raised to cover the winter heating period: from €250,000 to €280,000 for the agriculture sector, from €300,000 to €335,000 for the fisheries and aquaculture sectors, and from €2 million to €2.25 million for all other sectors;
2. aid to compensate for high energy prices (section 2.4 of the guidelines): this section will also be extended by six months and will continue to apply until 30 June 2024. Under this section, Member States can only continue to provide support by covering part of the additional energy costs if energy prices significantly exceed pre-crisis levels.

The Commission will monitor developments in the economic situation and is ready to respond swiftly in the event of a new crisis. At present, it has no plans to consult Member States again on the crisis-specific instruments provided by the Temporary Crisis and Transition Framework, which will be phased out on 30 June 2024.