State aid: research and development and innovation

SUMMARY OF:

Communication from the Commission — rules on State aid for research and development and innovation

WHAT IS THE AIM OF THE COMMUNICATION?

The communication seeks to clarify the rules and conditions under which European Union (EU) Member States can grant State aid to companies to carry out research, development and innovation (R&D&I) activities.

KEY POINTS

The rules relating to State aid for R&D&I activities consist of two complementary parts.

Regulation (EU) No 651/2014, known as the General Block Exemption Regulation (GBER, see summary), sets out the conditions under which R&D&I aid (among other types of State aid) is exempt from compulsory prior notification to the European Commission (i.e. block-exempted).
The system for State aid for research, development and innovation (the ‘R&D&I framework’) contains rules for the Commission to assess R&D&I aid that is ineligible for block exemption.

Speeding up the State aid granting process

Under the GBER, the amounts below which aid is exempted from notification for Commission approval were significantly increased. For example, the Member States can grant aid for experimental development of up to €15 million per project and per beneficiary without prior Commission approval, compared to €7.5 million under the previous rules.
This system gives the Member States more flexibility and speeds up the process for implementing R&D&I aid.

Extension of exemptions

Aid exempt from notification extends to:

fundamental research;
industrial research;
experimental development, including pilot projects and prototypes;
feasibility studies;
research infrastructures;
innovation clusters;
aid for process and organisational innovation.

Potentially higher levels of State aid

To help industry overcome financing gaps, the R&D&I framework permits, for individually notified measures, aid of up to 70% of eligible costs for large companies and 90% for small companies doing applied research, including the costs of prototyping and demonstration.
The higher aid levels are available if there is a genuine financing gap. The Commission carries out a detailed analysis, based on the criteria in the framework, to confirm the necessity for granting such higher rates, so as to avoid undue distortions of competition in the EU single market.

Combination of State aid for R&D&I with EU resources under Horizon Europe or with projects with the seal of excellence quality label

To simplify the assessment of large aid amounts for projects that are clearly in the common EU interest, specific rules were added to the GBER and adopted under Commission Regulation (EU) 2021/1237. These concern aid:

for projects awarded a seal of excellence quality label;
for Marie Skłodowska-Curie actions and the European Research Council’s Proof of Concept actions;
involved in co-funded research and development projects;
for teaming actions (institution-building actions).

Application

The Member States had to ensure that their existing R&D&I aid schemes were in line with this framework by 1 January 2015.

BACKGROUND

R&D&I activities aim to help achieve the target of spending 3% of the EU’s gross domestic product on R&D&I and thereby to:

ensure intelligent and sustainable economic growth;
limit distortions of competition arising from R&D&I aid.

MAIN DOCUMENT

Communication from the Commission — Framework for State aid for research and development and innovation (OJ C 198, 27.6.2014, pp. 1–29).