State aid remains frontrunner for EU Green Deal - new State aid guidelines on Climate, Energy and Environment (CEEAG)

The European Commission (EC) has published its long-awaited revised Climate, Energy and Environmental Aid Guidelines (CEEAG). The CCEAG form part of the EC’s efforts to bring competition rules in line with the aims of the European Green Deal. 

The Guidelines are marked as the EC’s flagship rules to guide Member States on their green investments to support the EU’s ambition to become the first climate-neutral continent. The rules will serve as a roadmap on how the EC will evaluate national support in areas such as decarbonisation, renewables, carbon neutrality, resource efficiency and pollution reduction.

The revised CEEAG broaden the sustainability net and provide guidance on investment areas such as clean mobility, energy efficient buildings and sustainable technologies to remove greenhouse gas emissions. The focus of the CEEAG has shifted towards environmental and climate protection, with rules that allow for higher aid amounts and new aid instruments, and provide increased flexibility on the justifications for such aid. The EC’s aim is a contemporary and fit-for-purpose State aid framework, but striking the balance has proven challenging. 

While the new Guidelines are welcomed by many, we also expect them to raise questions among stakeholders such as environmental groups. In particular, while the CEEAG aim to phase out fossil fuels, they still allow certain subsidies to the polluting end of the energy scale.

That said, the direction of travel is clear and the revision will put pressure on companies across the EU block to reinvent themselves; to access public funding, they will have to deliver green. 

The Guidelines will be formally adopted, and enter into force, in January 2022.