The European Commission temporarily allows more ‘green’ subsidies

The European Commission makes it easier for EU countries to support key sectors for the transition to a net-zero-carbon economy. It wants to stimulate investments in the development of clean technologies. A more favorable subsidy climate should deter companies from moving to the US, for example, where billions in ‘green’ subsidies are available.

The new measures are temporary in nature, the EU executive has warned. For example, Member States may, under certain conditions, grant state aid until 31 December 2025 for “strategic” production such as batteries, solar panels, wind turbines, heat pumps and the use and storage of electrolysis and carbon capture. The group hopes to rapidly roll out renewable energy and energy storage and decarbonization of industrial production processes.

The Commission also allows member states to grant an amount to companies in exceptional cases if there is a “real risk of investment leaving Europe”. The amount of aid is equal to what the company would receive elsewhere or to encourage the company to stay and invest in Europe. There are strict conditions for this. One is to use the latest manufacturing technology in terms of user emissions.