State Aid: Amendments To The European Commission's Temporary Crisis Framework In The Context Of The Russian Invasion Of Ukraine

• Jurisdiction: European Union
• Law Firm: CMS Law-Now
• Subject Matter: International Law, Strategy, Energy and Natural Resources, Energy Law, Oil, Gas & Electricity, Export Controls & Trade & Investment Sanctions, Economic Analysis, Renewables
• Author: Annabelle Lepiece
• Published date: 10 March 2023

On 20 July 2022, the European Commission adopted an amendment to the Temporary Crisis Framework for State aid measures to support the economy following Russia's aggression against Ukraine. The amendments include an increase in the limited amount of assistance and technical adjustments. It also provides for new categories of aid to support Member States' efforts to enable the EU to become independent of fossil fuels.

Since its adoption on 23 March 2022 (see our article of25 March 2022), the Temporary Crisis Framework has allowed Member States to implement numerous aid schemes in an effort to support businesses affected by the Russian invasion of Ukraine.

The different categories of aid schemes that can be granted until 31 December 2022 are as follows:

• limited amounts of aid, initially capped at EUR 400,000 per company and per country (except for agriculture, fisheries and aquaculture, which are subject to a specific threshold);
• guarantees and subsidised loans;
• aid to compensate for high energy prices.

Member States must notify the European Commission of planned aid schemes before they are implemented in order to obtain formal approval. The Temporary Framework sets out the conditions of compatibility for such aid to be authorised.

Since the entry into force of the Temporary Crisis Framework, the Commission has approved more than 50 schemes notified by Member States.

The amendment adopted on 20 July 2022 has several objectives.

First, with regard to aid schemes already covered, the amended Temporary Crisis Framework increases the maximum amount of aid that can be authorised for the limited amount category of aid. Member States may now grant limited amounts of aid of up to EUR 500,000 per undertaking and per country, and up to EUR 62,000 and EUR 75,000 in the agriculture, fisheries and aquaculture sectors respectively.

The Commission provides some technical clarifications regarding aid in the form of guarantees and loans.

The Commission has also clarified the conditions under which Member States may grant aid as compensation for the recent increase in the cost of gas and electricity for businesses. Among other things, such aid may not cover more than 70% of the beneficiary's gas and electricity consumption during the same period in the previous year.

Under the amended Framework, Member States will be able to implement aid schemes that allow them to support the important and one of the urgent objectives of the REPowerEU plan, which is to accelerate the...