France’s nearly one billion euro state aid program approved by EU Commission

The Finnish government has taken the stance that the EU’s crisis aid should be temporary. The European Commission has suggested that a joint financial instrument of the EU could be a solution to state aid competition. On Wednesday, the European Commission approved a 900 million euro French state aid program to support companies investing in biomass and renewable hydrogen for energy and fuel production. This program falls under the crisis and transition period state support framework.

The EU has temporarily relaxed its state aid rules, with the crisis flexibilities valid until the end of June and the transitional period flexibilities valid until the end of 2025. The French aid program involves direct grants covering eligible investment costs to support the move towards a zero-emissions economy while ensuring fair competition opportunities in the internal market.

Former Prime Minister of Italy Enrico Letta is reporting to the European Council on the future of the internal market, which will be discussed by EU leaders in an extraordinary summit in April. The Finnish Confederation of Business and Industry has called for new tools to compete for green and digital investments, suggesting a tax incentive to attract foreign investments. EK hopes that Finland will form a position on how the EU can attract strategic investments in the future.

Flexibilities in state aid rules have been extended after 2022 to support the green transition, with subsidies available for low-carbon initiatives and renewable energy. Options for new tools to attract investments include forming a financial instrument within the EU to improve Europe’s investment competitiveness. CEO of EK Jyri Häkämies has suggested a European fund as a better option than a tough competition for state aid.

By Aiden Johnson

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