The European Commission has approved a €1.1 billion Italian scheme to support investments for the production of equipment necessary to foster the transition towards a net-zero economy, in line with the Green Deal Industrial Plan.
The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on 9 March 2023 and amended on 20 November 2023, to support measures in sectors which are key to accelerate the green transition and reduce fuel dependencies.
The Italian measure
Italy notified to the Commission, under the Temporary Crisis and Transition Framework, a €1.1 billion scheme to support investments for the production of relevant equipment, key components and critical raw materials necessary to foster the transition to a net-zero economy.
Under this measure, which will be partially funded through the Recovery and Resilience Facility (“RRF”), the aid will take the form of direct grants. The maximum aid amount per beneficiary will be €150 million, which can be increased to €200 million for beneficiaries located in regions eligible for aid under Article 107(3)(c) TFEU (so-called ‘c’ areas) and €350 million for beneficiaries located in regions eligible for aid under Article 107(3)(a) TFEU (so-called ‘a’ areas).
The European Commission (EC) has authorized the Italian government to allocate a portion of its Covid recovery funds towards financing a program designed to stimulate green technology production. This program offers direct grants of up to €350 million for producers of green technologies, such as electrolyser manufacturers for renewable hydrogen, to establish new manufacturing facilities.
Financial Support Extended for Key Components and Critical Raw Materials in Green Technology Sector
Manufacturers of key components specifically designed for and primarily used in green technologies, including membranes in electrolysers, as well as producers of critical raw materials essential for these technologies, will be eligible for financial support under the new scheme. Grants will start at €150 million, with the potential to increase to €200 million or €350 million for projects located in regions identified by the EU as relatively deprived and strategically important for investment.
The measure will be open to companies producing relevant equipment, namely batteries, solar panels, wind turbines, heat-pumps, electrolysers, equipment for carbon capture usage and storage, as well as key components designed and primarily used as direct input for the production of such equipment or related critical raw materials necessary for their production.
The Commission found that the Italian scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework. In particular, the aid (i) will incentivise the production of relevant equipment for the transition towards a net-zero economy; and (ii) will be granted no later than 31 December 2025.
The Commission concluded that the Italian scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of the Green Deal Industrial Plan, in line with Article 107(3)(c) TFEU and the conditions set out in the Temporary Crisis and Transition Framework.
On this basis, the Commission approved the aid measure under EU State aid rules.
Background
On 9 March 2023, the Commission adopted a new 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 Framework amends and prolongs in part the Temporary Crisis Framework, adopted on 23 March 2022, to enable 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 and Transition Framework has been amended on 20 November 2023 to prolong by six months a limited number of sections aimed at providing a crisis response following Russia’s aggression against Ukraine and the unprecedented increase in energy prices.
Margrethe Vestager, Executive Vice-President in charge of competition policy: “This €1.1 billion Italian scheme, partially funded by the Recovery and Resilience Facility, will support the production of strategic equipment, namely batteries, solar panels, heat-pumps, wind turbines, electrolysers and carbon-capture usage and storage. These are key for the transition towards a net-zero economy. At the same time, the scheme ensures that possible competition distortions remain limited.”
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