State Aid

POLICY DEVELOPMENT

Consultation on affordable housing State Aid rules

The European Commission is consulting until 4 November 2025 on a proposal to amend the Services of General Economic Interest (“SGEI”) state aid rules to help Member States provide affordable housing. The Commission is proposing to add “affordable housing” to the SGEI Decision 2012/21/EU set of exemptions, which allows aid to be granted for specified services without prior notification to the Commission. Currently, the decision only caters for social housing.

State Aid guarantee notice to be reviewed by June 2027

The European Commission is reviewing its “guarantee notice”, which outlines how it evaluates state guarantees on loans. The Commission considers that the notice remains relevant, as it helps ensure that guarantees are awarded on market terms and do not constitute aid but has proposed amendments to enhance and streamline the framework. Potential changes include adjustments to aid amounts, mechanisms to pass on risk-reduction benefits to borrowers, and better alignment with the broader state aid rules. The Commission plans to initiate a formal review in early 2026 to be finalised by June 2027.

Extension of rescue and restructuring State Aid rules

The European Commission announced a one-year extension to the current framework, allowing Member States to grant rescue and restructuring aid to companies in difficulty. Provisions will now remain in effect until 31 December 2026. Separately, the Commission plans to amend the Guidelines to ensure they remain fit for purpose. Changes envisaged include expanding the scope of the Guidelines to include the steel sector and amending the definition of “undertaking in difficulty” to capture some start-ups. A Call for Evidence is open until 14 November 2025. Rescue and restructuring aid are considered some of the most distortive types of aid and are therefore only permitted under strict conditions.

Clean Industrial Deal State Aid Framework

The European Commission published a staff working document looking at how the Clean Industrial Deal State Aid Framework is intended to contribute to accelerating investment to achieve Clean Deal objectives. Our briefing on this State aid framework is available here: Clean Industrial Deal State Aid Framework.

STATE AID APPROVALS

Cleantech manufacturing capacity

The European Commission approved a €61.5 million Italian scheme to support investments in manufacturing capacity in line with the Clean Industrial Deal. The aid will take the form of direct grants, subsidised interest rates and loans. It will be open to companies that carry out investments in Emilia Romagna which add manufacturing capacity for the production of net-zero technologies in Annex II of the CISAF, as well as the production of the main specific components of these technologies. The scheme includes aid to produce new or recovered critical raw materials necessary for final products or main specific components.

The Commission also approved a €700 million Spanish scheme to support strategic investments that add clean technology manufacturing capacity under the CISAF.

Security of electricity supply

The European Commission approved an Estonian €750 million strategic reserve for electricity supply in emergency situations. The strategic reserve, which will be in place until 2035, will be open to all projects that can contribute to achieving security of supply, including generation, demand-side response and storage. Projects will compete based on the amount of aid requested per MW of capacity available during a scarcity event.

The European Commission also approved an Austrian scheme to safeguard security of electricity supply for a period of five years starting in October 2026. The scheme extends an existing network reserve that was approved in 2021 to end in 2026. Under the scheme, one of the Austrian transmission system operators will grant aid to operators of qualifying power plants which have notified their intention to close down their plants but which are relevant to keep the system in balance. The scheme will also allow payments to be made to electricity storage facilities and demand-response providers.