30 Apr 2021

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The European Commission adopts new Regional Aid Guidelines

On 19 April 2021, the Commission adopted its revised guidelines on regional State aid. The guidelines set the rules under which Member States can grant State aid to companies to support the economic development of disadvantaged areas in the EU on the basis of national regional aid maps approved by the Commission.

Regional aid being an important instrument to ensure territorial cohesion in the EU, the revision of the guidelines was much awaited in light of the new policies of the Union regarding the Green Deal and the Industrial and Digital Agendas. It is also the first set of guidelines to be updated following the comprehensive evaluation of the State aid rules adopted in the context of the State Aid Modernisation.

Overall, the structure of the guidelines has been simplified and its language clarified. In terms of content, the new guidelines offer increased aid intensities to incentivise Member States to support the European Green Deal and Digital Strategy objectives in disadvantaged areas. The new rules also address the specific difficult situation of territories identified for support from the Just Transition Fund by enabling Member States to easily assign the non-predefined ‘c'-area qualification to Just Transition Areas as well as very sparsely populated areas.

Finally, the revised guidelines include an adjustment in the balancing exercise of the positive and negative effects of the aid on competition. In its compatibility assessment under Art. 107(3)(c) TFEU, the Commission may take into account, in addition to the objective of regional development and cohesion, whether the aid contributes substantially in particular to the digital transition or transition towards environmentally sustainable activities.  

The guidelines will enter into force on 1 January 2022 but Member States can anticipate the application of the new maps. They apply for the period of 2022-2027.