EU to increase state support for businesses hit by energy crisis
The European Commission has extended the Temporary Crisis Framework allowing direct subsidies or other forms of state aid for businesses affected by the energy crisis to mitigate the negative economic impact.
The Temporary Crisis Framework allows EU member states to ﬁnancially support businesses affected by the energy crisis. Through direct subsidies and other forms of aid (e.g., loans, guarantees, tax relief), member states can help businesses ensure sufficient liquidity for their operations and compensate for the additional costs incurred because of exceptionally high gas and electricity prices.
As the Temporary Crisis Framework was to end on 31 December 2022, the European Commission has decided to extend it to allow member states to continue to make use of exemptions from the ban on granting state aid in connection with the ongoing war in Ukraine and the energy crisis. The adopted amendments complement the EU's emergency measures on intervention in energy markets and:
- extend the validity of the measures under the Temporary Crisis Framework until 31 December 2023
- increase the maximum aid limit for a single business up to EUR 2 million; however, aid may be higher if other conditions are met
- provide for more ﬂexible criteria for granting aid (e.g., in exceptional cases, allowing public guarantees exceeding 90% coverage to be granted to energy businesses)
- require recipients of aid of more than EUR 50 million to meet commitments to reduce their carbon footprint and protect the environment.
The new wording of the Temporary Crisis Framework thus allows higher state aid to be granted to businesses. However, larger businesses will have to commit to meeting additional EU green policy obligations.