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<\/figure><\/div>\n\n\n\nOn Wednesday (1 February), European Commission President Ursula von der Leyen presented the new green industrial plan, launched in reaction to the US Inflation Reduction Act (IRA) which provides $369 billion in subsidies for clean industry.<\/p>\n\n\n\n
While most of the plan was unveiled in the EU competition chief Margrethe Vestager\u2019s consultation plans earlier this week, details over the functioning of \u2018matching subsidies\u2019 were long awaited.<\/p>\n\n\n\n
The new rules are designed to boost member states\u2019 capacities to incentivise industries to stay in Europe in the face of large foreign subsidies \u201cin sectors strategic for the transition towards a net-zero economy\u201d, the document reads.<\/p>\n\n\n\n
The Communication relates to the Temporary Crisis and Transition Framework, one of the pillars of the Green Deal Industrial Plan.<\/p>\n\n\n\n
The leaked document, labelled \u2018sensitive\u2019 and seen by EURACTIV, intends to \u201cspecify the criteria for the assessment of the compatibility with the internal market of State aid measures\u201d.<\/p>\n\n\n\n
Waving goodbye to \u2018technology neutrality\u2019<\/h3>\n\n\n\n
The Communication confirms the Commission\u2019s intention to enable \u2018matching subsidies\u2019, whereby the EU can match a subsidy offer a company receives from a country outside of Europe \u2013 in order to prevent the company from moving abroad.<\/p>\n\n\n\n
As the proposal limits those sectors to the production of \u201cbatteries, solar panels, wind turbines, heat-pumps, electrolysers and carbon capture usage and storage (CCUS) as well as related critical raw materials\u201d, it marks a departure point from the Commission\u2019s previous stance of \u2018technology neutrality\u2019.<\/p>\n\n\n\n
To be eligible for the support, member states would need to prove that without it, there\u2019s a risk of such production sites leaving Europe or being built elsewhere.<\/p>\n\n\n\n
\u201cBefore granting the aid, the granting authority must verify the concrete risks of diverting the productive investment outside the EEA [European Economic Area] and that there is no risk of relocation within the EEA,\u201d the document reads.<\/p>\n\n\n\n
Except for in exceptional circumstances, this support should not exceed \u20ac100 million for richer areas and \u20ac300 million for poorer regions, termed \u201cassisted areas designated in the applicable regional aid map\u201d, the paper reads.<\/p>\n\n\n\n
Matching foreign subsidies, but no go-alone for Germany<\/h3>\n\n\n\n
However, the Commission can approve even higher support than that on a case-by-case basis for projects within poorer regions \u2013 those with a GDP of less than 75% of the EU average \u2013 or those which are spread across several EU countries. <\/p>\n\n\n\n
This would be conditional on the company proving that they would receive the same amount of support outside the EU, such as under the US IRA.<\/p>\n\n\n\n
In those cases, the document says, the Commission could approve \u201can increased aid amount, maximum up to the amount of subsidy available for an equivalent investment in a third country jurisdiction\u201d.<\/p>\n\n\n\n
Such \u201cmatching\u201d of foreign subsidies was a key demand by France and Germany in a paper published last December.<\/a><\/p>\n\n\n\n