New rules on state aid for research, development, and innovation
In October, the European Commission adopted its revised rules on state aid for research, development, and innovation, replacing the existing 2014 framework and aiming to simplify the provision of state aid to boost investment into science, research and innovation (R&D&I) and enable the rapid development and deployment of cutting-edge technologies.
The new rules should primarily simplify the whole process of granting state aid, including the practical application of the framework and the reduction of the high administrative burden for both state aid providers and recipients. The rules also reflect recent EU policy developments relating to environmental and digital transformation.
The new R&D&I rules in particular:
- clarify the applicability of certain definitions in relation to digital technologies and digitisation-related activities (e.g., quantum technologies, blockchain technologies, artificial intelligence, cybersecurity)
- newly allow state aid to be granted for the construction and modernisation of infrastructures for testing and experimenting (e.g., test facilities or living laboratories), to up to 100% of eligible investment costs
- introduce a simplified mechanism for determining indirect costs for R&D projects eligible for state aid
- require ex-post evaluations of the use of state aid only for aid schemes whose total duration exceeds three years.
The above changes should strengthen the position of SMEs and industries where it is not possible to easily transition an innovative solution from the laboratory directly to the market (e.g., due to the need to carry out larger pilot or proof-of-concept projects) and increase investments into R&D&I, thus facilitating the development of cutting-edge and breakthrough technologies and their market launches.
The new rules, valid and effective from the end of October 2022, should not be overlooked by research institutions and other potential applicants for state aid.