European Commission approves, under EU state aid law, new Irish scheme to help businesses with energy costs

On 24 November 2022, the European Commission approved, under the EU's State Aid Temporary Crisis Framework, a €1.22bn Irish scheme to support many businesses in Ireland with higher energy costs as a result of the Ukraine crisis.

The Commission found the proposed Irish scheme to be in line with the conditions set out in the EU's Temporary Crisis Framework. The Commission found that the scheme was necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with article 107(3)(b) of the Treaty on the Functioning of the European Union and the terms of the Temporary Crisis Framework.

In terms of background, as a result of the Ukraine crisis, the European Commission adopted, on 23 March 2022, a Temporary Crisis Framework, based on article 107(3)(b) TFEU, to permit approval of certain aid measures by Member States under specified conditions. The scope of the Temporary Crisis Framework was expanded on 20 July 2022 but then amended and prolonged on 28 October 2022.

Ireland wanted to assist businesses affected by the crisis in terms of assisting them with their energy bills. So, Ireland notified to the Commission, under the Temporary Crisis Framework, a direct grants scheme that would be open to companies of all sizes active in all sectors affected by the Ukraine crisis, with the exception of credit and financial institutions. To be eligible under the Irish scheme, businesses must demonstrate that the average monthly unit price for either electricity or gas has increased by at least 50%, compared to the average unit price for the same month in the previous year. These businesses are eligible for aid up to 40% of those additional costs. The aid would not exceed €250,000 per beneficiary active in the primary production of agricultural products and €300,000 per beneficiary active in the fishery and aquaculture sector, and would be granted before 31 December 2023. The scheme would run initially until 28 February 2023, but may be extended until 30 April 2023 at the latest.

This approval is in line with the approvals by the European Commission of so many other Ukrainian-linked measures. The case is a further demonstration of how there have been so many specific crises in recent years necessitating State aid (e.g., the Financial Crisis, Covid and Ukraine).

For more information on this please contact Dr Vincent Power, Partner or any member of A&L Goodbody's EU, Competition & Procurement team.

Date published: 28 November 2022