Introduction

On 23 July 2021, the European Commission (“Commission”) adopted an extension of the scope of the General Block Exemption Regulation (“GBER”). The revised rules concern:

  • Aid for projects funded via certain EU centrally managed programmes under the new Multiannual Financial Framework; and
  • Certain State aid measures that support the green and digital transition and are also relevant for the recovery from the economic effects of the coronavirus pandemic.

Background

Article 107(1) TFEU sets out the criteria for any public support which is considered to be State aid. Member States are required to notify all their State aid plans to the Commission. Only after the Commission’s approval are they allowed to enact these measures (Article 108(3) TFEU).

Implemented in 2014, the GBER allows Member States to set up State aid measures without prior notification to the Commission, as long as all the GBER criteria are fulfilled. It applies to different sectors such as research and development, innovation, environmental protection, support to SMEs, etc. These categories are exempted from the requirement of prior notification and approval from the Commission, as they are unlikely to affect trade and distort competition. State aid measures that do not meet the GBER criteria are not necessarily incompatible with EU State aid rules, but must be notified to the Commission prior to their implementation. Failure to comply with these rules bears the risk of fines and possible recovery of the aid, if the measure is considered not compatible.

The GBER proved to be quite effective as the Commission reported that, since 2015, more than 96% of State aid measures did not require notification to the Commission.

Aid for projects under Multiannual Financial Framework

One pillar of the extension of the GBER is to coordinate EU funding rules under the new Framework and EU State aid rules in specific sectors. This is geared towards avoiding unnecessary complexities, while preserving competition within the EU Single market. As such, assessment of projects already carried out at EU-programme level will be used as the yardstick for national State aid measures or shared management programmes.

The national funds that are covered by the extension of the GBER relate to the following areas:

  • Market deficiencies: the amended GBER supports measures aimed at rapidly addressing market deficiencies in certain markets benefitting from State aid (energy, transport, broadband infrastructure etc.) within the InvestEU programme;
  • Research, Development and Innovation (RD&I) projects under the interstate cooperative Horizon 2020 and Horizon Europe programmes;
  • The European Territorial Cooperation (“ETC”) or otherwise known as “Interreg”: the GBER expands the ETC further to larger companies and inserts a minimum threshold for the notification; and
  • The European Innovation Partnership ”Agricultural Productivity and Sustainability (“EIP-AGRI”), and Operational Group projects or community-led local development (“CLLD”) projects.

In summary, the extended GBER means national measures that implement these European schemes no longer need to be notified prior to their application.

More possibilities to support the twin transition and the economic recovery from the coronavirus pandemic

The other pillar of the extension of the GBER is the ability of Member States to provide State aid to support the economic recovery of the coronavirus pandemic in a sustainable and resilient way without prior notification. The relevant categories of aid now exempted from prior notification to the Commission are:

  • Aid for energy efficiency projects in buildings;
  • Aid for recharging and refuelling infrastructure for low emission road vehicles; and
  • Aid for fixed broadband networks, 4G and 5G mobile networks, certain trans-European digital connectivity infrastructure projects and certain vouchers.

Such aid categories fall under policy areas that are top priorities for Europe’s twin transition: to a green and digital economy. In this respect, the GBER extension covers areas that are key for the EU’s new growth strategy to develop digital structures in line with its objective to become climate neutral by 2050. By increasing the flexibility for granting State aid in such areas, the Commission intends to support the economic recovery from of the coronavirus crisis, while ensuring that this will effectively contribute to the transition to a green and digital economy.

Concluding remarks

The expansion of the GBER is geared towards several objectives:

  • Consistency across the European Union;
  • Obtain a better overview of national projects related to EU projects;
  • Speed up delivery of public support while reducing administrative burdens;
  • Enhance cooperation under the EU Cohesion policy umbrella;
  • Ensure a practical application of the Green Deal’s twin digital and green transition; and
  • Relieve the Commission of some matters so as to focus on more complex and important State aid issues.

This is not the first time the Commission has adopted measures that seek to facilitate the application of State aid rules during the ongoing coronavirus pandemic. The Commission’s Temporary Framework for State aid measures supporting the economy during the pandemic is already proving to be a success (see our previous blog post here). The Commission also adopted measures aimed at supporting the agricultural and food sectors, which are severely affected by the pandemic (see our previous blog post here).

The Covington State aid team will continue to monitor the situation and update you on any new developments.

Tags: Competition, competition law, State Aid
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Photo of Johan Ysewyn Johan Ysewyn

Johan Ysewyn is widely recognised as one of Europe’s leading competition lawyers. As co-Chair of Covington’s Global Competition/Antitrust Practice, Johan brings over three decades of experience advising global corporates and financial institutions on their most complex and high-stakes competition and regulatory matters.

Clients…

Johan Ysewyn is widely recognised as one of Europe’s leading competition lawyers. As co-Chair of Covington’s Global Competition/Antitrust Practice, Johan brings over three decades of experience advising global corporates and financial institutions on their most complex and high-stakes competition and regulatory matters.

Clients turn to Johan for clear, strategic guidance on merger control, cartel and monopolisation investigations, and other antitrust enforcement actions. His approach is pragmatic and solution-driven, combining deep legal insight with a commercial understanding of his clients’ business.

Leading directories consistently highlight Johan’s exceptional skill and client service: Chambers Global describes him as “an exceptional lawyer who is solution-oriented, has a remarkable ability to rapidly understand our business and has excellent reactivity.” Who’s Who Legal praises his “energy and insight into cartel proceedings,” while Legal 500 calls him “one of the best European competition lawyers” with “a unique understanding of the EC and a very helpful network of connections across Brussels.”

Johan represents clients before competition authorities and courts around the world, leveraging his in-depth knowledge of regulatory processes and strong working relationships with key decision-makers, particularly within the European Commission’s DG COMP, who designated him as one of their Non-Governmental Advisors to the International Competition Network. His advisory practice spans the evolving intersections of competition law with ESG, digital markets, and strategic compliance.  His experience covers a wide range of sectors, including telecommunications, technology, media, financial services, healthcare, consumer goods, retail, energy, and transport.

Johan has extensive experience in global merger control, having advised on numerous complex, cross-border transactions requiring coordination across multiple jurisdictions. His recent merger work includes representing Discovery in its landmark acquisition of Warner Bros. and advising Illumina on its acquisition of Grail—both recognised as award-winning deals in the competition community. Johan’s merger practice spans a wide range of sectors, from media and technology to healthcare and energy, and he is known for navigating the most challenging regulatory reviews with strategic foresight and precision.

Renowned for his expertise in global cartel enforcement, Johan has represented immunity applicants and defendants in major cases involving industries such as financial services, consumer goods, pharmaceuticals, chemicals, and energy. He also advised the European Payments Council in the first European Commission investigation into standardisation agreements in the e-payments sector. A recognised thought leader, Johan co-authors the European Cartel Digest and lectures on cartel law and economics at the Brussels School of Competition.

In addition, Johan is one of Europe’s foremost practitioners in EU State aid law, advising both governments and beneficiaries. His experience includes landmark cases involving leading banks and airlines such as Fortis, KBC, Dexia, Arco, Citadele, airBaltic, and Riga Airport.

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