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State aid for environmental protection

State aid for environmental protectionNew state aid guidelines on environmental protection, adopted in early 2008, strike a vital balance between greater environmental benefits and distortions to competition.

The guidelines broaden the scope of aid projects and increase the proportion of funding for projects that can come from aid, compared with previous ones published in 2001.

The guidelines cover:

  • Measures that increase environmental protection beyond EU standards or where no standards exist, including the acquisition of new vehicles
  • Environmental studies
  • Energy saving initiatives
  • Renewable energy
  • Cogeneration and district heating
  • Waste management
  • Remediation of contaminated sites
  • Relocation of operations
  • Aid involved in tradable permit schemes
  • Aid in the form of reductions or exemptions from environmental taxes

Aid ‘intensities’ – the proportion of an initiative’s cost that can be covered by state aid – have increased considerably. For SMEs, the intensities have gone from between 50 and 60% of a project’s cost, to between 70 and 80%.

Where measures involve eco-innovation, a further 10% aid bonus may be granted. If the aid is well targeted, the guidelines are very generous. For instance, for the production of renewable energy, Member States have the possibility to cover 100% of the extra costs taken on by companies.

The guidelines set out the conditions that Member States must respect when granting state aid. Enterprises should contact their national authorities responsible for granting environmental aid if they want to improve the level of environmental protection and need assistance.


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