France’s nearly one billion euro state aid program approved by EU Commission

The EU’s Flexible Approach to State Aid for Green Initiatives: The Future of Strategic Investments

The European Commission has approved a 900 million euro French state aid program to support companies investing in biomass and renewable hydrogen for energy and fuel production. This program falls under the crisis and transition period state support framework, as the EU has temporarily relaxed its state aid rules due to the current crisis. The Finnish government has taken the stance that the EU’s crisis aid should be temporary, with subsidies available for low-carbon initiatives and renewable energy until June 2025.

Former Prime Minister of Italy Enrico Letta is reporting to the European Council on the future of the internal market, which will be discussed by EU leaders in an extraordinary summit in April. The Finnish Confederation of Business and Industry has called for new tools to compete for green and digital investments, suggesting a tax incentive to attract foreign investments. EK hopes that Finland will form a position on how the EU can attract strategic investments in the future.

The EU has been using flexibilities in state aid rules to support green initiatives since 2022. Options for new tools to attract investments include forming a financial instrument within the EU to improve Europe’s investment competitiveness. CEO of EK Jyri Häkämies has suggested a European fund as a better option than a tough competition for state aid. As global competition intensifies, it is crucial for Europe to stay ahead by investing in innovative technologies and sustainable practices that align with its long-term goals of reducing emissions and promoting economic growth.

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