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State aid: the European Commission has widened the scope of the General Block Exemption Regulation

The 2014 General Block exemption Regulation (the “Regulation”) exempts certain categories of state aid from the requirement of prior notification to the Commission and they can be implemented by Member States without prior Commission approval, provided they meet certain requirements and they are unlikely to distort competition in the single market.

The decision to widen the Regulation is aimed at facilitating public investments that can create jobs and growth, without unduly prejudicing effective competition. By giving Member States more flexibility to implement state aid, the Regulation will make it easier to implement crucial infrastructure investments.

For the first time the Regulation exempts from notification state aid to small airports and ports. In particular, it exempts investment aid for airports handling up to 3 million passengers per year provided that:

  • aid is not granted to airports located in the catchment area (100 kilometres distance or 60 minutes of travel time) of another airport;
  • aircraft-513641_960_720the funded infrastructure will be fully used and not larger than expected demand;
  • the aid only covers the “funding gap” and it does not go beyond what is necessary to trigger the investment, taking into account future revenues from the investment;
  • only a certain percentage of the investment costs is subsidised, depending on the size of the airport and on whether the airport is located in a remote region.

Investment aid to small ports  is exempted provided that:

  • the aid does not exceed a certain absolute threshold (between €40 million and €150 million);
  • the aid only covers the “funding gap”;
  • only a certain percentage of the investment costs is subsidised, depending on the size and the nature of the investment and on whether the port is located in a remote region;
  • the aid only covers investment costs, with the exception of dredging, for which both investment and maintenance costs are eligible for aid;
  • concessions to third parties for the construction, upgrade, operation or rent of port infrastructures are assigned on a competitive, transparent and non-discriminatory basis.

steamer-50445_960_720For small projects in ports, the Regulation lays down more flexible rules for investment aid.

The Regulation also widens the existing exemptions for state aid to culture, multi-purpose sports arenas, and the EU’s outermost regions.

In particular:

  • the maximum limit for aid to culture and to multi-purpose sports arenas has been increased on the basis that in these areas aid does not usually pose a threat to competition;
  • the rules on state aid to support the EU’s outermost regions have been simplified and Member States will be able to cover both the transport costs and other additional costs that undertakings operating in those regions have across all sectors of the economy;
  • projects funded by Member States that meet the criteria of the “Seal of Excellence” quality label under the EU Horizon 2020 SME instrument are exempted from notification;
  • start-up aid for small companies up to 5 years from their registration is also authorised.

In order to reduce differences between different areas of EU law, the Regulation allows “simplified cost options”, namely simplified methods for calculating costs eligible for support under the EU’s Structural and Investment Funds.

The amendment to the Regulation is fully in line with the objectives of the Commission’s Regulatory Fitness and Performance of EU Legislation agenda, which aims at ensuring that EU laws deliver benefits to citizens, businesses and to society as a whole.

 

 

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