The European Commission has approved a €2.9 billion French scheme for supporting investment in green industries (tax credit for investment in green industries) to foster the transition towards a net-zero economy, in line with the Green Deal Industrial Plan. The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on 9 March 2023 and amended on 20 November 2023, to support measures in sectors which are crucial for accelerating the green transition and reducing fossil fuel dependencies.

According to the Executive Vice-President Margrethe Vestager, in charge of competition policy, “the measure was assessed under the Temporary Crisis and Transition Framework. It has since March 2023 enabled Member States to design simple and effective schemes to support investments in net-zero equipment, while ensuring that support is proportionate, targeted and temporary. It follows the approval of similar schemes in Austria, Belgium, Germany, Hungary, Italy, Slovakia, and Spain, worth in total €9.1 billion, and with several others in the pipeline.”  

The Temporary Crisis and Transition Framework, complements the ample possibilities for Member States to design measures in line with existing EU State aid rules. For example, EU State aid rules enable Member States to help companies cope with liquidity shortages and needing urgent rescue aid. Furthermore, Article 107(2)(b) of the Treaty on the Functioning of the European Union enables Member States to compensate companies for the damage directly caused by an exceptional occurrence, such as that caused by the current crisis.

“The production of net-zero equipment in Europe is of strategic interest for the European economy and society. It has immense importance for achieving our goals in clean mobility, sustainability, and competitiveness.

Moreover, the Commission has adopted a separate decision approving €902 million of German support to Northvolt. The aid will enable Northvolt's investment in a gigafactory to produce battery cells for electric vehicles in Europe instead of the United States. It is the first individual measure that was approved in line with the exceptional possibility under the Temporary Crisis and Transition Framework. It allows for providing higher amounts of aid if the investment is at risk of being diverted from Europe due to the availability of foreign subsidies.

The decisions taken show that our state aid rules enable Member States to accelerate net-zero investments at this critical moment, while protecting the level playing field in the Single Market and cohesion objectives.” Said Margrethe Vestager.