Commission Regulation (EU) 2021/1237 of 23 July 2021 amending Regulation (EU) No 651/2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty (Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 108(4) thereof,

Having regard to Council Regulation (EU) 2015/1588 of 13 July 2015 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to certain categories of horizontal State aid (1), and in particular Article 1(1), point (a), thereof,

After consulting the Advisory Committee on State aid,

Whereas:

(1) Commission Regulation (EU) No 651/2014 (2) constitutes an important exemption from the general rule that Member States have to notify any plans to grant new aid to the Commission before implementing them, provided that certain pre-defined conditions have been fulfilled.

(2) In view of the economic and financial consequences that the COVID-19 pandemic has had on undertakings and in order to ensure consistency with the general policy response adopted by the Commission, especially in the period 2020-2021, Regulation (EU) No 651/2014 should be adapted. Undertakings which became undertakings in difficulty as a consequence of the COVID-19 pandemic should remain eligible for aid under Regulation (EU) No 651/2014 for a limited period, namely from 1 January 2020 to 31 December 2021. In addition, beneficiaries of regional investment aid, which have temporarily or permanently laid off staff due to the COVID-19 pandemic in the period from 1 January 2020 to 30 June 2021, should not be considered to have breached the obligation to maintain those jobs in the area concerned for a period of five years from the date the post was first filled, or three years in the case of small and medium-sized enterprises (“SMEs”).

(3) State aid granted to undertakings participating in European Innovation Partnership for agricultural productivity and sustainability (“EIP”) Operational Group projects covered by Article 35 of Regulation (EU) No 1305/2013 of the European Parliament and of the Council (3), or in community-led local development (“CLLD”) projects covered by Regulation (EU) No 1303/2013 of the European Parliament and of the Council (4) or by Regulation (EU) 2021/1060 of the European Parliament and of the Council (5) has little impact on competition, in particular, in view of the positive role the aid plays for sharing knowledge, especially for local and farming communities, as well as the often collective nature of the aid, and its relatively small scale. The nature of these projects is integrated, multi-actor and multi-sector, which can lead to certain difficulties for their classification under State aid law. Given the local nature of individual EIP Operational Group and CLLD projects, selected on the basis of a multi-annual local development strategy determined and implemented by public-private partnership and their orientation to community, social, environmental and climate interest, this Regulation should address certain difficulties faced by EIP Operational Group and CLLD projects in order to facilitate their compliance with State aid rules.

(4) Given the limited effect on trade and competition of small amounts of aid granted to SMEs benefitting, directly or indirectly, from EIP Operational Group and CLLD projects, simple rules for cases where the aggregate amount of aid per project does not exceed a certain ceiling should be laid down.

(5) Undertakings participating in European Territorial Cooperation (‘ETC’) projects covered by Regulation (EU) No 1299/2013 of the European Parliament and of the Council (6) or by Regulation (EU) 2021/1059 of the European Parliament and of the Council (7) often experience difficulties in financing additional costs stemming from the cooperation between partners located in different regions and in different Member States or third countries. Given the importance of ETC for the cohesion policy, providing a framework for the implementation of joint actions and policy exchanges between national, regional and local actors from different Member States or third countries, certain difficulties faced by ETC projects should be addressed in order to facilitate their compliance with State aid rules. In the light of the Commission’s experience, Regulation (EU) No 651/2014 should apply to aid for ETC projects, irrespective of the size of the beneficiary undertakings.

(6) In addition, given the limited effect on trade and competition of small amounts of aid granted to undertakings participating in ETC projects, in particular, where those undertakings receive that aid indirectly, simple rules for cases where the aggregate amount of aid per undertaking per project does not exceed a certain ceiling should be laid down.

(7) Research and development projects or feasibility studies awarded a Seal of Excellence quality label following an evaluation and ranking carried out by independent experts, which are regarded as excellent and worthy of receiving public funding, but cannot be funded under the Horizon Framework Programme due to lack of available budget, may be supported by national resources including resources from the European Structural and Investment Funds for the period 2014-2020, and from the European Regional Development Fund and the European Social Fund+ for the period 2021-2027. State aid granted to such research and development projects which are carried out by SMEs should be considered compatible with the internal market and be exempted from the notification requirement under certain conditions. In addition, it should not be necessary to reassess eligibility conditions already assessed at Union level in accordance with the Horizon 2020 or Horizon Europe Framework programme rules prior to the awarding of the Seal of Excellence label. The profit or non-profit character of the entities carrying out the projects is not a relevant criterion under competition law.

(8) State aid granted to support the deployment of certain performant fixed broadband networks and State aid granted to support the deployment of certain performant passive mobile networks should be considered compatible with the internal market and be exempted from the notification requirement under certain conditions, in order to help bridge the digital divide in market failure areas, while limiting risks of distorting competition and crowding out private investment.

(9) State aid granted in the form of connectivity vouchers for consumers in order to facilitate teleworking, online education and training services as well as for SMEs should be considered compatible with the internal market and be exempted from the notification requirement under certain conditions, in order to help bridge the digital divide in market failure areas, while limiting risks of distorting competition and crowding out private investment.

(10) State aid granted to certain projects of common interest in the area of trans-European digital connectivity infrastructures financed under Regulation (EU) 2021/1153 of the European Parliament and of the Council (8) or awarded a Seal of Excellence quality label under that Regulation should be considered compatible with the internal market and be exempted from the notification requirement under certain conditions, in order to help bridge the digital divide in market failure areas, while limiting risks of distorting the competition and crowding out private investment.

(11) Grants provided to researchers under the European Research Council (‘ERC’) Proof of Concept and under the Marie Skłodowska-Curie actions (‘MSCA’) that qualify as economic activities should also be considered compatible with the internal market when they benefit from a Seal of Excellence quality label.

(12) Combined public funding from national resources and resources directly managed by the Union for research and development projects (such as those implemented under a European institutionalised Partnership based on Article 185 or Article 187 of the Treaty or programme co-fund action as defined in the Horizon Europe Framework programme) can contribute to improving the competitiveness of European research and development, as such research and development projects are considered to meet objectives of common European interest and address well-defined market failures. This is considered to be the case where such projects are selected on the basis of the evaluation and ranking made by independent experts in line with Horizon 2020 or Horizon Europe Framework Programme rules, following trans-national calls, where at least three Member States (two Member States in the case of Teaming actions), or alternatively two Member States and at least one associated country, participate. The financial contributions made by Member States, including resources from the European Structural and Investment Funds for the period 2014-2020, and from the European Regional Development Fund and the European Social Fund+ for the period 2021-2027, to those co-funded research and development projects should be considered compatible with the internal market and be exempted from the notification requirement under certain conditions. In addition, it should not be necessary to reassess eligibility conditions already assessed at trans-national level in accordance with Horizon 2020 or Horizon Europe programme rules by independent experts prior to a research and development project’s selection.

(13) The Horizon 2020 and Horizon Europe Framework programmes define which research and innovation actions are eligible for funding. In this regard, research and innovation action, as defined under the Horizon Framework Programme, will normally correspond to fundamental research and industrial research activities, as defined in Regulation (EU) No 651/2014. Moreover, innovation action supported under the Horizon Framework Programme will normally correspond to the definition of experimental development activities under Regulation (EU) No 651/2014. The simplifications provided for in this Regulation in the area of research and development should, however, not be used to introduce aid measures that finance activities that are not eligible under State aid rules for research and development, that is to say, activities going beyond the scope of experimental development activities. To this effect, the definitions regarding Technological Readiness Level (‘TRL’) may also be taken into account by the Member States. State aid for research and development activities at TRL 9 level is considered to go beyond the scope of the definition of experimental development and should consequently be excluded from the scope of Regulation (EU) No 651/2014.

(14) Support for energy efficiency measures in certain buildings can be combined, under the InvestEU Fund and subject to simplified conditions, with support for the on-site production of renewable energy and its storage, for on-site charging points for vehicles and for the digitalisation of these buildings. This combined support under simplified conditions is possible for residential buildings, buildings dedicated to the provision of education or social services, buildings dedicated to activities related to public administration or to justice, police or fire-fighting services, and buildings in which economic activities occupy less than 35 % of the internal floor area. Given the nature of the activities taking place in such buildings, support to improve the energy performance of such buildings has a more limited impact on competition. To ensure a consistent treatment of projects financed with the InvestEU Fund and with purely national resources, it is appropriate to amend the provisions of Regulation (EU) No 651/2014 concerning investment aid for energy efficiency measures and to introduce compatibility conditions for facilitating the combination under the same project of investments in energy efficiency measures with investments improving the energy performance of the building (that is to say, integrated on-site installations generating renewable energy, on-site equipment for the charging of electric vehicles of the building’s users), and investments for the digitalisation of the building, in particular to increase its smart readiness. To that end, the entire investment cost of the energy efficiency measure and the various pieces of equipment should constitute the eligible costs while a uniform maximum aid intensity would apply.

(15) To ensure a consistent treatment between projects financed with the support of the InvestEU Fund and with purely national resources, it is appropriate to amend Regulation (EU) No 651/2014 by introducing compatibility conditions for investment aid for certain types of low emission mobility infrastructure for road vehicles. Investment aid for publicly accessible recharging or refuelling infrastructure for road vehicles should be considered compatible with the internal market and be exempted from the notification requirement of Article 108(3) of the Treaty in so far as it allows for an increased level of environmental protection and does not unduly distort competition. As regards refuelling infrastructure, in the absence of a harmonised definition of low-carbon hydrogen, only investment aid for refuelling infrastructure supplying road vehicles with renewable hydrogen should be covered by the block exemption. The Commission will consider extending the scope of the relevant provisions to also include low-carbon hydrogen once a harmonised definition is adopted. In addition, for both recharging and refuelling infrastructure certain safeguards should be in place to limit distortions of competition. The compatibility conditions should, in particular, ensure that support generates additional investments and addresses market failures or sub-optimal investment situations, that the development of the market is not hindered by support and, in particular, that there is open and non-discriminatory access to the infrastructure. In addition, investment aid for recharging or refuelling infrastructure should be granted on the basis of a competitive bidding process to ensure proportionality and minimise distortions on the infrastructure market. Finally, to stimulate effective competition, aid granted to the same beneficiary under each measure should be capped.

(16) Financial products supported by the InvestEU Fund may involve funds controlled by Member States, including Union shared management funds, contributions stemming from the Recovery and Resilience Facility, or other contributions by Member States, in order to increase leverage and support additional investments in the Union. For instance, Member States have the possibility of contributing a part of Union shared management funds or Recovery and Resilience Facility resources to the Member State compartment of the EU guarantee under the InvestEU Fund. Moreover, Member States could finance the financial products backed by the InvestEU Fund through their own funds or national promotional banks. Such financing may qualify as ‘State resources’ and may be imputable to the State if the Member States have discretion as to the use of those resources. Conversely, when Member States have no discretion as to the use of the resources or act in line with normal market conditions, the use of those funds may not constitute State aid.

(17) Where national funds, including Union shared management funds, constitute State aid within the meaning of Article 107(1) of the Treaty, a set of conditions should be set out on the basis of which the aid could be considered compatible with the internal market and be exempted from the notification requirement in order to facilitate the implementation of the InvestEU Fund.

(18) The design of the InvestEU Fund incorporates a number of important competition safeguards, such as supporting investments which deliver Union policy objectives and Union added value and the requirement for the InvestEU Fund to be additional and address market failures and sub-optimal investment situations. Moreover, the governance system and decision-making process will ensure, before issuing the EU guarantee, that the InvestEU supported operations meet the above requirements. Finally, the support provided by the InvestEU Fund will be transparent and its effects will be evaluated. Therefore, State aid involved in the financial products supported by the InvestEU Fund should be considered compatible with the internal market and be exempted from the notification requirement based on a limited set of conditions.

(19) Regulation (EU) No 651/2014 should therefore be amended accordingly,

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EU) No 651/2014 is amended as follows:

(6) in Article 7(1), the second sentence is replaced by the following: ‘The amounts of eligible costs may be calculated in accordance with the simplified cost options set out in Regulation (EU) No 1303/2013 of the European Parliament and of the Council(), or Regulation (EU) 2021/1060 of the European Parliament and of the Council(), whichever is applicable provided that the operation is at least partly financed through a Union fund that allows the use of those simplified cost options and that the category of costs is eligible according to the relevant exemption provision. ()  Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ L 347, 20.12.2013, p. 320)." (**)  Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (OJ L 231, 30.6.2021, p. 159).’;"

(10) in Article 12, paragraph 1 is replaced by the following: ‘1.   In order to enable the Commission to monitor the aid exempted from notification by this Regulation, Member States, or alternatively, in the case of aid granted to European Territorial Cooperation projects referred to in Article 20, the Member State in which the Managing Authority is located, shall maintain detailed records with the information and supporting documentation necessary to establish that all the conditions laid down in this Regulation are fulfilled. Such records shall be kept for 10 years from the date on which the ad hoc aid was granted or the last aid was granted under the scheme. The first subparagraph shall not apply in respect of aid granted to European Territorial Cooperation projects referred to in Article 20a, as well as to European Innovation Partnership for agricultural productivity and sustainability Operational Group projects and to community-led local development (“CLLD”) projects as referred to Article 19b.’;

(12) in Article 16, paragraph 4 is replaced by the following: ‘4.   The eligible costs shall be the overall costs of the urban development project to the extent that they comply with Articles 37 and 65 of Regulation (EU) No 1303/2013, or Articles 67 and 68 of Regulation (EU) 2021/1060, whichever is applicable.’;

(14) after Article 19b, the following section heading is inserted: ‘

SECTION 2a

Aid for European Territorial Cooperation ’;

(16) the following Article 20a is inserted: ‘Article 20a Limited amounts of aid to undertakings for participation in European Territorial Cooperation projects

(17) in Article 25, paragraph 1 is replaced by the following: ‘1.   Aid for research and development projects, including research and development projects having received a Seal of Excellence quality label under the Horizon 2020 or under the Horizon Europe programme and co-funded research and development projects and, where applicable, aid for co-funded Teaming actions, shall be compatible with the internal market within the meaning of Article 107(3) of the Treaty and shall be exempted from the notification requirement of Article 108(3) of the Treaty, provided that the conditions laid down in this Article and in Chapter I are fulfilled.’;

(19) the following Article 36a is inserted: ‘Article 36a Investment aid for publicly accessible recharging or refuelling infrastructure for zero and low emission road vehicles

(25) in Article 58, paragraph 3a is replaced by the following: ‘3a.   Any individual aid granted between 1 July 2014 and 2 August 2021 in accordance with the provisions of this Regulation as applicable at the time of granting the aid shall be compatible with the internal market and exempted from the notification requirement of Article 108(3) of the Treaty. Any individual aid granted before 1 July 2014 in accordance with the provisions of this Regulation, with the exception of Article 9, as applicable either before or after 10 July 2017, or before or after 3 August 2021, shall be compatible with the internal market and exempted from the notification requirement of Article 108(3) of the Treaty.’;

(26) in Annex II, Part II is replaced by the text set out in the Annex to this Regulation.

Article 2

This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 23 July 2021.

For the Commission The President Ursula VON DER LEYEN

(1) OJ L 248, 24.9.2015, p. 1.

(2) Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty (OJ L 187, 26.6.2014, p. 1).

(3) Regulation (EU) No 1305/2013 of the European Parliament and of the Council of 17 December 2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and repealing Council Regulation (EC) No 1698/2005 (OJ L 347, 20.12.2013, p. 487).

(4) Regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December 2013 laying down common provisions on the European Regional Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and repealing Council Regulation (EC) No 1083/2006 (OJ L 347, 20.12.2013, p. 320).

(5) Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (OJ L 231, 30.6.2021, p. 159).

(6) Regulation (EU) No 1299/2013 of the European Parliament and of the Council of 17 December 2013 on specific provisions for the support from the European Regional Development Fund to the European territorial cooperation goal (OJ L 347, 20.12.2013, p. 259).

(7) Regulation (EU) 2021/1059 of the European Parliament and of the Council of 24 June 2021 on specific provisions for the European territorial cooperation goal (Interreg) supported by the European Regional Development Fund and external financing instruments (OJ L 231, 30.6.2021, p. 94).

(8) Regulation (EU) 2021/1153 of the European Parliament and of the Council of 7 July 2021 establishing the Connecting Europe Facility and repealing Regulations (EU) No 1316/2013 and (EU) No 283/2014 (OJ L 249, 14.7.2021, p. 38).