Commission approves €750 million Dutch State aid scheme to support the decarbonisation of industrial processes to foster the transition to a net-zero economy

state aid

The European Commission has approved a €750 million Dutch scheme to support investments in the decarbonisation of industrial production processes to foster the transition towards a net-zero economy. The scheme was approved under the State aid Temporary Crisis and Transition Framework (‘TCTF') adopted by the Commission on 9 March 2023 and amended on 20 November 2023 and on 2 May 2024.

The Dutch measure

The Netherlands notified to the Commission, under the TCTF, a €750 million scheme to support investments in the decarbonisation of industrial production processes to foster the transition towards a net-zero economy.

The scheme will incentivise companies in the Netherlands to reduce greenhouse gas emissions from industrial production processes by at least 40% compared to today. The aid will take the form of direct grants that will be awarded following one or more calls for proposals.

The measure will be open to companies operating an industrial installation in the Netherlands, for investments enabling the substitution of fossil fuels through the electrification of industrial processes. To be eligible, beneficiaries have to reduce by 2030 their annual greenhouse gas emissions by at least 0.1 million tonnes below the minimum thresholds set by the national CO2 levy. The scheme will make a significant contribution to the Dutch strategy to reduce greenhouse gas emissions by the industry by 4 million tons by 2030.

The Commission found that the Dutch scheme is in line with the conditions set out in the TCTF. In particular, the aid (i) will not exceed €200 million per beneficiary; and (ii) will be granted no later than 31 December 2025. Furthermore, the aid will be subject to conditions to secure actual emissions savings.

In addition, the aid will be subject to conditions to limit undue distortions of competition, including a claw-back mechanism based on which the beneficiaries will return part of the aid received to the Netherlands in case the project is generating extra net revenues. Furthermore, beneficiaries will not be able to increase their production capacity beyond 2% compared to today.

The Commission concluded that the Dutch scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of the REPower EU Plan and the Green Deal Industrial Plan, in line with Article 107(3)(c) of the Treaty on the Functioning of the EU and the conditions set out in the TCTF.

On this basis, the Commission approved the aid measure under EU State aid rules.

Background

On 9 March 2023, the Commission adopted the TCTF to foster support measures in sectors which are key for the transition to a net-zero economy, in line with the Green Deal Industrial Plan.

The TCTF provides for the following types of aid, which can be granted by Member States until 31 December 2025 in order to accelerate the green transition:

• Measures accelerating the rollout of renewable energy (section 2.5). Member States can set up schemes for investments in all renewable energy sources, with simplified tender procedures.
• Measures facilitating the decarbonisation of industrial processes (section 2.6). Member States can support investments in the decarbonisation of industrial activities with a view to reduce dependency on imported fossil fuels, in particular through electrification, energy efficiency and the switch to the use of renewable and electricity-based hydrogen which complies with certain conditions, with expanded possibilities to support the decarbonisation of industrial processes switching to hydrogen-derived fuels.
• Measures to further accelerate investments in key sectors for the transition towards a net-zero economy (section 2.8). Member States can grant investment support for the manufacturing of strategic equipment (namely batteries, solar panels, wind turbines, heat-pumps, electrolysers and carbon capture usage and storage), as well as for production of key components and for production and recycling of related critical raw materials. Support is capped at a certain percentage of the investment costs up to specific amounts, depending on the location of the investment and the size of the beneficiary. Higher support is possible for small and medium-sized companies, as well as companies located in disadvantaged regions to ensure that cohesion objectives are duly taken into account. Furthermore, in exceptional cases, Member States may provide higher support to individual companies, where there is a real risk of investments being diverted away from Europe, subject to a number of safeguards.

More information on the TCTF can be found here.

The non-confidential version of today's decision will be made available under the case number SA.112112 in the State aid register on the Commission's competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.

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