Brussels, 20 December 2013
State aid: Commission's competition service consults on draft rules on state aid for research, development and innovation.
The European Commission's competition directorate-general has published today for public consultation a draft framework setting out revised conditions under which Member States can grant state aid for research, development and innovation activities (R&D&I). After having analysed the comments by stakeholders, the Commission envisages adopting a new framework in spring 2014.
Commission Vice President in charge of competition policy Joaquín Almunia said: "The new Framework we propose means more effective R&D&I aid, fewer distortions of competition and less red tape. It will help Member States reach the targets of the Europe 2020 Strategy for smart, sustainable and inclusive growth. Well-designed public support to R&D&I will enhance competitiveness and will help address the societal challenges the EU is facing."
The proposed framework on state aid for R&D&I is not a stand-alone act but is complementary to the General Block Exemption Regulation (GBER) which sets the conditions for certain aid measures – including R&D&I-aid – to be exempted from prior notification to the Commission. The Framework, in turn, sets the standard for large R&D&I aid that goes beyond the GBER's limits and requires individual scrutiny by the European Commission before being granted. The GBER is also currently under revision and a new draft has been submitted to public consultation on 18 December 2013 (see IP/13/1281).
Both the GBER and the framework will offer Member States more possibilities to channel state aid towards boosting innovation, growth and jobs: the conditions for subsidised pilot and demonstration projects will be more flexible, thus facilitating the validation of technologies which are vital for the competitiveness of European industry and addressing societal challenges such as climate change. Furthermore, the GBER will admit greater scope for the automatic approval of innovation aid. Also, a new category of aid for the construction and upgrade of research infrastructure will contribute to the strengthening of the European research area, to the benefit of both science and industry.
The aid thresholds above which support would no longer be covered by the GBER, and would have to be notified for approval on the basis of the framework, will be significantly increased. This means that Member States will have more flexibility for implementing R&D&I aid. For example, whilst currently aid for experimental development of up to €7.5 million can be granted without prior Commission approval, under the proposed new rules Member States would have to seek Commission approval only if the aid exceeds €15 million per project and per beneficiary. In order to better assist long-term, strategically significant R&D public-private partnerships in the EU, notification thresholds would even be doubled if the project is a EUREKA project or is implemented by a EU Joint Undertaking.
R&D projects that are also co-financed by the EU, e.g. under Horizon 2020, will now benefit from legal presumptions regarding the necessity and appropriateness of state aid. This will simplify the assessment of even large aid amounts for projects that are clearly in the common European interest.
Developing new technologies or processes can involve significant technological and commercial risks. In order to help industry overcome any given funding gap, the proposed Framework will allow even higher aid levels than both the current and future GBER would allow: up to 70% of eligible costs for large companies and 90% for small companies in cases of applied research, even including the costs of prototyping and demonstration. A detailed analysis, based on the proposed Framework's assessment criteria, would of course need to confirm the necessity for granting such higher rates.
All in all, the GBER and the Framework will strike a balance between the simplification of state aid rules on the one hand, and on the other hand the Commission's obligation to scrutinize the aid that has the strongest potential to distort competition in the internal market.
Lastly, in order to facilitate public-private R&D-collaboration and knowledge transfer, the new Framework will establish greater legal certainty in situations of public-private R&D&I interactions. In complement to the forthcoming Commission Notice on the notion of state aid, the proposed Framework will give guidance on the concepts of 'economic activities' the funding of which is subject to state aid rules, and of 'market price' in situations of public-private research contracts and knowledge transfer. It will also explain when pre-commercial and commercial procurement are presumed not to involve state aid to contractors.
Responses to the public consultation can be submitted until 20 February 2014. In light of the submissions, the Commission will then adopt a new R&D&I Framework, which will enter into force on 1 July 2014.
The text of the draft R&D&I Framework is available at:
The Community Framework for State aid for research and development and innovation ("R&D&I Framework"; see MEMO/06/441) entered into force on 1 January 2007 and defines criteria for assessing the compatibility of state aid for R&D&I with the internal market, under Articles 107(3)(b) and 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU).
The revision of the R&D&I Framework, together with the revision of the GBER's rules on R&D&I aid (see IP/08/1110, MEMO/08/482, IP/13/736, and most recently IP/13/1281), is embedded in the Commission's State Aid Modernisation initiative (see IP/12/458). In this context, the revision of R&D&I rules seeks to support sustainable growth and contribute to the quality of public spending by discouraging aid that does not bring real added-value and distorts competition.
This consultation follows a mid-term review of the current rules and a first public consultation, which took place between December 2011 and February 2012. Both the mid-term review and the first public consultation showed that the Framework has served its purpose well, but that a number of aspects need to be revised if it is to continue promoting "better" R&D&I aid.
Drawing on the results of the mid-term review and the public consultation, but also on its broad experience in applying the R&D&I Framework, the Commission's competition service published an Issues Paper in December 2012, which identified possible orientations for the future rules on R&D&I aid. At a workshop in January 2013, those orientations were discussed with representatives of Member States, EFTA-countries, the EFTA-surveillance authority, the European Parliament, the European Economic and Social Committee, the Committee of Regions and industry stakeholders.
The proposal for a revised R&D&I Framework is complementary to the Commission's proposal for a revised GBER, as it provides for criteria to assess R&D&I aid that falls outside the GBER's scope, in particular individual R&D&I aid exceeding the exemption thresholds of the GBER, which must therefore be notified to the Commission. The revised R&D&I Framework will thus apply only to aid that cannot be implemented by Member States without prior notification to the Commission.
A first public consultation on a revised GBER opened on 8 May 2013. A second consultation on additional categories of exemptible aid was launched on 24 July 2013 in a distinct draft "GBER II". As regards aid for R&D projects, the proposal for a revised GBER gives Member States more flexibility by significantly increasing the notification thresholds. It also facilitates aid for demonstration projects and pilot plants, provides simpler rules for innovation aid and expands them to new categories, and introduces, for the first time, dedicated rules for aid for research infrastructures.