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Brussels, 7th December 2006

State aid : Commission authorises aid scheme by French Agence de l’innovation industrielle for BioHub R&D programme

The European Commission has authorised French aid for the BioHub R&D programme under the Community state aid rules. Companies and research laboratories from a number of Member States are working together on this programme, which is being led by French starch supplier Roquette. Its objective is to develop new environmentally friendly chemical products and processes. Aid totalling €41.8 million will be provided under the aid scheme, which has already been approved by the Commission (see IP/06/1020). The Commission takes the view that the scheme meets the conditions for state aid for research and development, in particular in terms of aid intensity and its incentive effect.

Competition Commissioner Neelie Kroes said “The development of green chemistry and support for biotechnology are fundamental to competitiveness and sustainable growth in the European economy. BioHub is adding to Community initiatives in this area. The Commission has checked that the aid for this ambitious programme complies with the relevant rules and does not significantly affect competition in the common market”

The BioHub R&D programme will develop new products from renewable raw materials and new production processes using biotechnologies instead of petrochemical processes. It will help to find ways of reducing greenhouse-gas emissions. Some of the products targeted are also likely to bring about major improvements in public health.

The programme, which is being led by starch supplier Roquette, involves Metabolic Explorer (France), a young start-up company specialising in the application of biotechnology in the chemical sector, chemical producers Arkéma (France), Cognis (Germany), Solvay (Belgium), DSM (Netherlands) and Tergal Fibres (France), as well as Eurovia (France) and equipment supplier Sidel (France). The Lyon and Rouen INSA laboratories, the IMMCL laboratories in Lille, TU in Eindhoven and the Kluyver Centre for Genomics in Delft are subcontractors. The programme will cost a total of €88 million spread over five years. The aid notified on 25 April 2006 by the French Agence de l’innovation industrielle represents 50% of the project's eligible costs. It takes the form of €21.5 million in grants and €20.3 million in repayable advances.

The Agence de l’innovation industrielle was set up in 2005 in response to a report by Jean-Louis Beffa, Saint-Gobain's CEO, to President Chirac. It selects, finances and assesses major strategic programmes with a significant innovatory component and involving large industrial companies, small and medium-sized enterprises and research laboratories headed by a lead company. The Commission authorised the aid scheme on 19 July 2006 (IP/06/1020). Under the current rules, projects like BioHub that are financed under the scheme must be individually notified to and examined by the Commission if they exceed certain thresholds.

The Commission took the view that the aid for the BioHub programme satisfied the conditions set out in the current framework for state aid for R&D. In particular, the arrangements for repaying aid in the form of advances in the event of the programme's success comply with the Commission's decision-making practice in this area and hence meet the framework's aid intensity conditions. The aid scheme also has a significant incentive effect as it will enable beneficiary companies to carry out more R&D than would otherwise have been possible. The aid is consequently eligible for the derogation provided for in Article 87(3)(c) of the EC Treaty. BioHub is the first project to be funded under the aid scheme of the Agence de l'innovation industrielle approved by the Commission.

On 22 November 2006 the Commission adopted a new framework for state aid for research, development and innovation which will apply from 1 January 2007 (see IP/06/1600).

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