Regional Aid, RDI Aid Ramona IANU Country coordinator for Romania, DG Competition 1.

Regional Aid, RDI Aid

Ramona IANUȘ Country coordinator for Romania, DG Competition

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REGIONAL AID 2014-2020

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Overview

1. Regional State aid & Cohesion2. Regional aid: Where?3. Regional aid: What for?4. Compatibility assessment of investment aid5. Conclusion: Main changes RAG 2014-20

Regional aid maps2014-2020

EU Regional State aid policy

• Exemption from the general ban on State aid for regional aid measures:• "Aid to promote the development of areas where the

standard of living is abnormally low or where there is serious underemployment…" (Art. 107(3)(a) TFEU)

• "Aid to facilitate the development of … certain economic areas…" (Art. 107(3)(c) TFEU)

• Criteria for the application of the regional aid exemptions:• Successive Communications since early 1970’s• Successive Regional Aid Guidelines (1998, 2006, 2013)• Block Exemption Regulations (2006, 2008)

Support to enterprise

and innovation(€70-80 bn)

EU cohesion policy2007-2013(€347 bn)

Non-cofinanced state aid

Regional aid(€98 bn)*

R&D&I aid(€74bln)*

Environment aid

(€91 bn)*

Other horizontal aid

(training, employment SME)

(€168 bn)*

Total state aid 2007-2013(€360 bn)*

* estimates

EU Cohesion policy – State aid

Regional aid reform and "SAM"

■ Communication on "State Aid Modernisation" (2012)• More with less: Support growth with constrained public budgets • Target enforcement on most distortive cases• More effective/efficient control: Simplify rules & streamline

procedures

■ Impact on review of regional aid rules:• Stricter rules for most distortive types of regional aid

• Sectoral aid schemes, large individual aids, …• RAG 2014-2020: Adopted in 28 June 2013

• Less distortive regional aid measures GBER 2014-2020 • Widening of scope + lighter requirements than RAG• adopted in first half 2014

RAG 2014-2020

• Purpose of regional aid:• To promote the development of disadvantaged areas by addressing

their economic handicaps• To promote economic cohesion of the EU

• How?• Support for investment and job creation by undertakings • Support for operating expenses of undertakings (exceptionally)

• Criteria set out in RAG:• Where can regional aid be granted? • What can aid be granted for?• How much aid can be granted?

1.Regional State aid & Cohesion2. Regional aid: Where?3. Regional aid: What for?4. Compatibility assessment of investment aid5. Conclusion: Main changes RAG 2014-20

Regional aid maps

For regional aid to be effective, it needs to be focused on the regions that suffer the most serious difficulties

• Regions with abnormally low standard of living Art. 107(3)(a) • Reference point is EU average • Criterion GDP/cap lower than 75% EU average

Outer Most Regions (Art. 349 TFEU)

• Other disadvantaged areas Art. 107(3)(c) • Ex-Article 107(3)(a) regions (2011-2013)• Sparsely populated area s• Other problem regions with population of at least 50,000

Regional aid maps

Assisted area(% EU GDP/head)

Large firms

Medium-sized firms

Small firms

'a' areas (<45%) 50% 60% 70%

'a' areas (45%-60%) 35% 45% 55%

'a' areas (60%-75%) 25% 35% 45%

Former 'a' areas (until end ‘17) 15% 25% 35%

Sparsely populated areas, external border areas

15% 25% 35%

Other 'c' areas 10% 20% 30%

Regional aid map also places limits on the amount of investment aid that can be granted in each region:

Regional aid maps - 3

Regional aid maps - 2014-2020MS  ‘a’ areas Predefined ‘c’ Non-predefined ‘c’ Total 2014-2020

Austria 25.8 25.8 Belgium 12.1 17.9 29.9Bulgaria 100 100.0Czech Republic 88.1 88.1Cyprus 50.0 50.0Denmark 8.0 8.0Estonia 100 100.0Finland 24.2 1.8 26.0France 2.9 21.2 24.1Germany 0 11.9 13.9 25.8Greece 45.9 10.3 43.8 100.0Hungary 70.4 6.3 76.7Ireland 51.3 51.3Italy 29.0 5.0 34.1Latvia 100 100.0Lithuania 100 100.0Luxembourg 8.0 8.0Netherlands 7.5 7.5Malta 100 100.0Poland 86.3 13.7 100.0Portugal 69.2 15.8 85.0Romania 89.4 10.6 100.0Slovakia 88.5 88.5Slovenia 52.9 47.1 100.0Sweden 12.3 12.3Spain 6.8 28.8 33.0 68.6UK 3.9 0.4 22.8 27.0EU-27 25.2 7.4 14.6 47.2

Total [2013 situation][22.5][25.9]

[100.0][88.6][50.0]

[8.6][100.0]

[33.0][18.4][29.6]

[100.0][100.0]

[50.0][34.1]

[100.0][100.0]

[16.0][7.5]

[100.0][100.0]

[76.7][100.0]

[88.9][100.0]

[15.3][59.6][23.9]

1.Regional State aid & Cohesion2. Regional aid: Where?3. Regional aid: What for?

Initial InvestmentOperating aid

4. Compatibility assessment of investment aid5. Conclusion: Main changes RAG 2014-20

Investment aid: “Initial investment”

■ Investment in tangible and intangible assets relating to

In 'a' regions & SME in 'c' areas:- Setting up of a new

establishment;

- Diversification of output of establish-ment into products not previously produced in the establishment;

- Extension of the capacity of an existing establishment;

- Fundamental change in the production process.

■ Acquisition of assets linked to establishment that has closed or would have closed

■ No replacement investment!

Investment aid: “Initial investment”

■ Investment in tangible and intangible assets relating to

In 'a' regions & SME in 'c' areas:- Setting up of a new

establishment;

- Diversification of output of establish-ment into products not previously produced in the establishment;

- Extension of the capacity of an existing establishment;

- Fundamental change in the production process.

LEs in 'c' areas:- Setting up of a new establishment;

- Diversification of activity of establishment, if new activity is not same as or similar to activity previously per-formed in the establishment;

- Diversification of existing establishments into new products or new process innovations.

■ Acquisition of assets linked to establishment that has closed or would have closed

■ No replacement investment!

Investment aid: “Eligible costs”

Two ways to calculate “eligible costs”:

■ Costs calculated on the basis of investment costs:• Material assets (land, building, equipment)• Immaterial assets:

• Transfer of technology• Patents, operating or patented and non-patented know-how

licenses• For large enterprises, limited to 50% of eligible costs

• Costs calculated on the basis of wage costs:

Wage costs arising from job creation as a result of the initial investment (two-year wage cost)

Investment aid: “Conditions”

■ Conditions for regional investment aid:

• Maintenance of investment (or jobs) in the region:• 5 years for large enterprises• 3 years for SMEs

• 25% of investment should be from own contribution or external finance, but totally free of public support

• Formal application for aid before works on the project started (formal incentive effect)

Investment aid: “How much aid?”

■ Maximum allowable aid is defined as a percentage of eligible costs of the initial investment (GGE)

■ Maximum aid intensity is set in the regional aid maps and depends on:• The level of development of the region• The size of the enterprise• The size of the investment project

• Regional aid ceilings set in regional aid maps apply to investments with a total eligible cost of less than 50 Mio €

• For larger investment projects (LIPs): scaling down of maximum aid intensity ceiling

Investment aid: “LIPs”

■ LIP: Large Investment Project with eligible cost > 50 mio €:● LIPs less affected by regional handicaps of assisted areas ● Higher risk of distortive effects (competitors, competing regions)

• Reduced aid: • Adjusted max. aid amount = RAC x [(50 + (0.5 x B) + (0.34 x C)]

(B = Cost between 50 Mio and 100 Mio; C = Cost above 100 Mio)

• Notification threshold:

Notification required if:10% Region Aid > € 7.5 Mio15% Region Aid > € 11.25 Mio25% Region Aid > € 18.75 Mio35% Region Aid > € 26.25 Mio 50% Region Aid > € 37.5 Mio

Operating aid

■ Operating aid:• aimed at reducing a firm‘s current expenses • not linked to initial investment

■ Normally prohibited

■ Permitted exceptionally in cases where investment aid alone is not enough to trigger a process of regional development:• The least developed ‘a’ regions (SME only)• The sparsely populated ‘c’ regions (SME + LE)• Outer Most Regions (SME + LE)

Operating aid: “Conditions”

■ MS has to demonstrate that the aid is :● An appropriate instrument for addressing the specific problem● Proportionate to the specific handicap

■ Aid should be limited in time and progressively reduced, except in the following cases:

● Permanent handicaps of the outermost areas ● Permanent aid to offset depopulation in the least densely populated

areas● Permanent transport aid in the outermost and low population

density areas

1.Regional State aid & Cohesion2. Regional aid: Where?3. Regional aid: What for?4. Compatibility assessment of investment aid5. Conclusion: Main changes RAG 2014-20

Compatibility: Sectoral scope v forum shopping

Excluded from RAG but covered by other guidelines:■ Agriculture, forestry■ Fisheries, aquaculture■ Transport, incl. airports■ Energy sector

Regional aid prohibited:■ Steel■ Synthetic fibres

No aid under GBER but to be notified under RAG:■ Shipbuilding

Covered by RAG but with specific additional conditions (transparency, fair access):■ R&D infrastructure■ Broadband networks

Compatibility Assessment

■ Common principles: • contribution to an objective of common interest• necessity of the aid • appropriateness of the aid • aid limited to the minimum necessary • avoidance of undue negative effects (black-list) • transparency of aid

■ NO aid if one principle is NOT respected

GBER v Guidelines (RAG, RDI)

COMMON PRINCIPLE

GBER RAG, RDI

Contribution to common objective

Presumed To be demonstrated

Need for state intervention (market failure, cohesion objective)

Presumed for the aid categories under GBER

RAG: Defined by Commission (regional aid maps)RDI: to be demonstrated

Appropriateness Presumed To be demonstrated

Incentive effect Application for aid before start of worksAd hoc aid to large enterprises (stricter)

Stricter formal requirements + in depth analysis of the counterfactual for notified individual aid

Proportionality Maximum aid intensties Net extra costs+max aid intensities

Negative effects Limited by excluding more distortive aid from GBER

Description of negative effects + BLACK list

Transparency of aid Publication only for aid >500 000

Notification v block exemption

Exempted under new GBER: ■ Multi-sectoral schemes■ Operating aid schemes:

• Transport aid schemes for outermost regions + sparsely populated areas

• Operating aid schemes for outermost regions up to 10% of annual sales revenues or turnover

■ Ad hoc aid

To be notified under RAG:

■ Sectoral schemes; ■ Other operating aid schemes■ Large schemes (annual budget >

150 million EUR)■ Individual aid > notification

thresholds■ Individual aid for new products

and new process innovations ('c' regions)

■ Aid linked to relocation (closing down similar activities in the EEA in 2 years before or after)

Assessment of notified aid schemes

• Objective of common interest:

• Assumed for co-financed schemes

• To be demonstrated for other schemes

• Appropriateness: schemes are appropriate instrument

• Incentive effect (formal requirements): start of the project after application for aid

• For SMEs: application form

• For large enterprises: application form +documentary evidence of the counterfactual

• Credibility check by granting authority for SMEs+LEs

• Proportionality: net extra cost + cap (aid intensity on total costs)

• For SMEs: total costs + aid intensity

• For large enterprises: net extra cost with a cap (aid intensity on total costs)

• Limitation of negative effects: to ensure that aid is not attracting an investment from a poor(er) region (i.e. higher or same aid intensity as the target region)

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Notified individual awards

• Objective of common interest: demonstration that aid contributes to regional development strategy

• Appropriateness: aid instrument is appropriate

• Incentive effect: formal requirements (start of the project after submission of application form); demonstration of the counterfactual scenario

• Proportionality: net extra cost + cap (aid intensity on total costs)

• Black list (negative effects outweigh any positive effects):

• NO investment aid if it attracts an investment from a poorer region

• NO investment aid if relocation of an investment due to the aid

• NO investment aid if investment takes place on a market with structural overcapacity

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1.Regional State aid & Cohesion2. Regional aid: Where?3. Regional aid: What for?4. Compatibility assessment of investment aid5. Conclusion: Main changes RAG 2014-20

Main changes 2014

■ Stricter requirements under RAG 2014-20• Compatibility assessment for notified measures outside SF

operations• Incentive effect• Proportionality • Necessity of aid

• Limits on eligibility of initial investment projects by LE’s in ‘c’ areas• No forum shopping• Evaluation + increased transparency requirements

■ Widening of scope of GBER• Lighter compatibility assessment requirements

AID FOR RESEARCH, DEVELOPMENT AND

INNOVATION2014-2020

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Modernised R&D&I State-aid rules

Objective - Competitiveness and growth: State aid for more and better R&D&I in the common interest. Mobilisation of private R&D&I-investment. Limitation of any negative effects of R&D&I State aid. Clearer and simpler rules

Achieving the objective – modernised rules More scope for the automatic approval of R&D&I aid – the General Block Exemption

Regulation New aid objective ‘Research Infrastructure’; innovation aid simplified and more

generous rules - the General Block Exemption Regulation More flexible aid ceilings for large individual aid measures – the R&D&I-Framework Greater legal certainty for public-private R&D-collaboration and for demand-side

measures (pre-commercial public procurement) that foster innovation – the R&D&I-Framework

More precise criteria for the detailed economic assessment of R&D&I-aid – faster assessment procedure - the R&D&I-Framework

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General BlockExemption Regulation (GBER) 2014

! Notification thresholds higher than under GBER 2008 !

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R&D&I-Framework 2014

presence/absence of State aid all large individual R&D&I aid above

notification thresholds Assessment criteria for large schemes –

focus on evaluation by MS

------------------------------------Notification threshold-------------------------------

Allows ad-hoc aid for large enterprises. Large aid schemes not eligible. Only transparent aid instruments. All eligible R&D&I-aid objectives.

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R&D&I State aid rules - architecture

Presence of State aid in R&D&I-typical situations (Chap. 2 R&D&I-Framework)

Situation - public funding for economic activities of research organisations and research infrastructure

Situation - R&D-services carried out by publicly financed research organisations on behalf of industry

Situation - R&D-collaboration between publicly financed research organisations and industry

New: Public R&D-procurement situation

The Framework’s R&D&I-specific explanations are complementary to, and more detailed than, those given in the forthcoming Communication on the Notion of Aid.

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Presence of State aid in public funding for economic activities of research organisations and research infrastructure

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Public funding for research organisations/infrastructure

Non-economic activities (point 19): Primary activities: Public education organised within the national educational system; independent R&D; wide dissemination of research results on a non-exclusive and non-discriminatory basis;

Knowledge transfer conducted by the research organisation/infrastructure or jointly with/on behalf of other such entities; all profits reinvested in primary activities.

Economic activities: e.g. renting out equipment or laboratories to undertakings, R&D services, contract research for industry.

Cross-subsidisation of economic activities is avoided by separating the costs, revenues and financing of economic from non-economic activities –

Lack of clear separation → Entire research organisation and its funding are subject to State aid rules!

Separation e.g. demonstrable in annual financial statements

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Public funding for research organisations/infrastructure

New presumption: If RO/RI is both publicly and privately funded → State aid is present if public funding allocated to the relevant entity for a specific accounting period exceeds the costs of non-economic activities incurred in that period (point 20 – footnote 22).

Example:• Project of EUR 200 million

• Public funding = EUR 160 million (80% of the total costs) allocated to non-economic activities → no State aid

• Remaining EUR 40 million are financed through means that do not include State resources → no State aid

• If the public funding of the research infrastructure exceeds EUR 160 million (80% of the total costs) – presumed State aid ('spill-over' of public funding)

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Public funding for research organisations/infrastructure

New concept: 'Ancillary economic activities' (point 20) not subject to State-aid rules if

directly related to and necessary for the operation of the RO/RI or intrinsically linked to RO/RI main non-economic use. Must be limited in scope - consuming exactly the same inputs as non-economic

activities and allocated capacity is ≤ 20 % of relevant entity's overall annual capacity

! Claw-back of excessive aid resulting from a higher proportion of economic activities in comparison with ex-ante estimations!

No State aid to RO/RI as an 'intermediary': Any advantage through public funding is quantifiable and demonstrable, and is fully passed on to the final recipients (e.g. price-reduction)

→ State aid compatibility/de-minimis conditions at customer level, and no further advantage for intermediary - selected with open tender

procedure, or customers are entitled to acquire services from any intermediary.

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Example of claw-back situations

• Scenario 1• Economic activity <20%• Cost of investment: EUR 10 million

• Economic activity @30%• Excessive support: 50% * (EUR 10 million - EUR 7 million) = EUR 1.5 million

• Scenario 2• Economic activity @ 30%• Support for business: 50% * (EUR 3 million) = EUR 1.5 million• Support for non-economic activities: EUR 7 million• • Economic activity 30% -> 40%• Excessive support: 50% * (EUR 4 - 3 million) = EUR 500,000

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Presence of indirect State aid (Section 2.2) to industry through R&D-services carried out by publicly financed research organisations (Point 2.2.1)

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Indirect aid to industry

Contract research or research services– How to avoid indirect State aid to undertakings?

Research service or contract research at market price, orwhere there is no market price:full costs of the service + margin commonly applied in the sector of the service concerned, orarm's length negotiations where research organisation/ infrastructure negotiates to obtain maximum economic benefit at the moment when the contract is concluded and covers at least its marginal costs.New option: Market value of IP-ownership or IP access may be deducted from the price if these remain with the research organisation/ infrastructure.New presumption: Specific research service/contract research for the first time on behalf of a given undertaking, on a trial basis and during a clearly limited period of time → Price charged is considered as market price if service/contract research is unique and no market for it.

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Presence of indirect State aid (Chap. 2.2) to industry in R&D-collaboration with publicly financed research organisations (Point 2.2.2)

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Indirect aid to industry

R&D-collaboration with publicly financed research organisations

– How to avoid indirect State aid to undertakings?

undertakings bear the full project costs, or Non-IPR may be widely disseminated and any IPR generated by

research organisations/ infrastructures are fully allocated to those entities, or

IPR/access rights allocation reflects work packages, contributions and respective interests, or

‘compensation equivalent to market price’; undertakings' financial and non-financial contributions to the research organisation's/infrastructure's costs that resulted in the IPR may be deducted.

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Indirect aid to industry - R&D&I-Framework 2014

IPR-transfer in R&D-collaboration with publicly financed research organisations

more elaborate explanations of ‘compensation equivalent to the market price’

Research organisations/infrastructures enjoy the full economic benefit of IPR/access rights, and :open, transparent and non-discriminatory competitive sale procedure, orindependent expert valuation, orarm's length conditions, orwhere undertakings have a right of first refusal: research organisations/infrastructures solicits offers from third parties so that the collaborating undertaking has to match its offer accordingly.

If none of above conditions is met → full value of the contribution of the research organisations/infrastructures is considered as an advantage for the collaborating

undertakings → State aid rules apply at their level.

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New in the Framework: Presence of State aid in public R&D-procurement (Section

2.3) -

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Public procurement of R&D-services

'exclusive development'• Public purchaser reserves all

results and benefits exclusively for itself for conduct of its own affairs

'pre-commercial' procurement• Public purchaser does not reserve all

results and benefits exclusively for itself for conduct of its own affairs

• Excludes purchase of commercial volumes of final product/servicePublic-procurement Directives

applyPublic-procurement Directives do not

apply

Open tender/restricted

procedure pursuant Directives

No a

id

if

No

aid

if

open, transparent non-discriminatory procedure; clear ex-ante arrangements; no preferential treatment in supply of final products; wide dissemination of non-IP; all IPR allocated to public purchaser, or full free IP-access for public purchaser and non-exclusive access for third parties at market terms

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Modernised R&D&I State-aid rules– eligible R&D&I-aid objectives -

GBER Articles 24-29

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Aid for R&D-projects 3 research categories:

fundamental research industrial research experimental development

New: Industrial research: now including laboratory-scale prototypes and small scale pilot lines. Reason: High technological risk – no commercial use – allow higher aid intensity than for 'experimental development.

New: ex-post deduction of commercial revenues generated by prototypes and pilots from eligible costs no longer applicable.

Supporting the transition from development to production - fast-moving technology markets!

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Interplay between the new GBER and the new R&D&I-Framework. R&D-project aid intensities (incl. top-ups)

Large enterprise

Medium-sized

Small

R&D projects- Fundamental research 100% 100% 100%

- Industrial research -'GBER'- Industrial research – 'detailed

assessment'

50-65%60-70%

60-75%70-80%

70-80%80-90%

- Experimental development - 'GBER'

- Experimental development -'detailed assement

25-40%

60-70%

35-50%

70-80%

45-60%

80-90%

- Feasibility studies 50% 60% 70%

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Innovation aid rules – now simpler & streamlinedGBER 2008

• 'Aid for young innovative enterprises'

• Various SME-innovation objectives: IPR costs, innovation advisory/support, loan of highly qualified personnel. Various levels of aid intensities/ notification thresholds

• Excluded from GBER: Aid for process and organisational innovation in services; projects must be ICT-related

• Excluded from GBER: Aid for innovation clusters. Cluster definition implies regional/physical component. Operating aid limited to 5 years.

GBER 2014• 'Start-up aid' - SME access-to-

finance. Various aid-instruments.

• Single SME- innovation aid category. Regular aid intensity - 50% and 100% if max. 200kEUR/3 years for advisory and support services. Single notification threshold - 5 million EUR/SME

• Block-exemptible. Higher aid-intensity for SMEs; no obligation to use/exploit ICT

• Block-exemptible. No longer necessary to operate 'in a region'. Higher aid intensity for investment aid - 50%; operating aid up to 10 years degressive.

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R&D Projects1. The aided part of the project shall completely fall within the

following categories:

(a)fundamental research - experimental or theoretical work undertaken primarily to acquire new knowledge

(b)industrial research - planned research or critical investigation for the developing of new or the significant improvement of current products, processes or services

(c)experimental development - acquiring, combining, shaping and using existing knowledge and skills to develop new or improved products, processes or services

(d)feasibility studies - evaluation and analysis of the potential of a project

R&D Projects Doubling the thresholds:• Fundamental research to EUR 40 million• Industrial research to EUR 20 million• Experimental development to EUR 15 million• For a EUREKA project or one implemented by a Joint

Undertakings under Article 185 TFEU double the above thresholds

Eligible costs cover: personnel costs, costs of instruments and equipment, costs for of buildings and land, costs of contractual research, knowledge and patents bought or licensed, costs of materials

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Innovation clusters• Innovation clusters - structures or organised groups of independent

parties designed to stimulate innovative activity • Aid may be granted exclusively to the legal entity operating the

innovation cluster• Notification threshold: EUR 7.5 million per cluster• Investment and operating aid (limited to maximum 10 years)• Aid intensities:- Investment aid: 50% plus regional bonuses (5/15 percentage points - Operating aid: 50%

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Innovation aid for SMEs• Simplified category of Innovation aid to SMEs with

streamlined conditions covering: Aid for industrial property rights costs Aid for the secondment of highly qualified personnel Aid for innovation advisory and support services

• Single notification threshold – EUR 5 million per undertaking, per project - and aid intensity – 50%

• Specific provision for aid for innovation advisory and support services allowing to increase the aid intensity up to100% if the aid amount remains below EUR 200 000 per undertaking within any 3 year period

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Process and organisational innovation

• Aid for new or significantly improved production or delivery method (significant changes only)

• Notification if more than EUR 7.5 million

• Aid to large undertakings only if they collaborate with SMEs that incur at least 30 % of the total eligible costs

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• Compatibility criteria for large individual aid subject to the

notification obligation• – the R&D&I-Framework

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Assessment principle

Assessment approach

Contribution to increased R&D&I and need for State intervention (market failure)

Systematic identification of objective of common interest.

Demonstration of general/specific market failure by MS for all notified cases, e.g. through sectoral comparison.

Presumption of absence of market failure where there are similar projects in the market. Presumption of presence of market failure for EU funded projects.

Appropriateness To be demonstrated; presumed for EU-funded project

Incentive effect Aid application before start of works

For large individual aids, MS to support counterfactual analysis of incentive effect with company- and industry-specific elements. Counterfactual scenario may even consist in "the absence of an alternative project" or in "an alternative project that is wholly or partly carried out outside the Union."

Proportionality Where no alternative project exists: Aid must not exceed the minimum necessary to make the project sufficiently profitable. This is the case if the internal rate of return (IRR) is brought to a level that corresponds to sector or firm specific hurdle rates. Where a counterfactual project exists: Aid must not exceed the net extra costs established by comparing the expected net present values of both alternative investments. Where a counterfactual exists but is too remote from aided project: Hurdle-rate approach may apply. All relevant expected costs and benefits must be considered over the lifetime

Negative effects Analysis of distorting dynamic incentives, creation of market power and maintaining inefficient market structures. Analysis of choice of location. Analysis of manifest negative effects, in particular if violation of EU law (such as free movement of goods and services).59

Detailed assessment of large R&D&I-aid– incentive effect, proportionality and the

'counterfactual scenario'

• 'Counterfactual scenario' - now more elaborately described: • "Comprehensive description of what would have happened

or could reasonably have been expected to happen without aid".

• Alternative scenarios clearly defined and sufficiently predictable considered by the beneficiary undertaking in its internal

decision making could for instance be described in internal business plans, risk

assessments, or in documents submitted to investors.• 'Counterfactual scenario' may even consist in "the absence of an

alternative project" or in "an alternative project that is wholly or partly carried out outside the Union."

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New clarification on the cumulation of State aid with EU-funding

total amount of State aid per activity or project per undertaking taken into account

EU-funding not controlled by MS not taken into account

EU-funding and State aid for same eligible costs must not exceed most favourable funding rate laid down in EU-law

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