The European Commission has approved a €960 million Czech scheme to support investments in strategic sectors to promote the transition to a low-carbon economy. This program contributes to the priorities of the European Commission for 2024-2029, as outlined in the Political Guidelines, which call for investments in clean energy and technologies. The program also supports the Clean Industrial Deal. The scheme was approved under the Temporary Crisis and Transition Framework (TCTF) adopted by the Commission on 9 March 2023 and subsequently amended on 20 November 2023 and on 2 May 2024.

The Czech measure

Czechia notified the Commission of a €960 million scheme under the TCTF to support investments in strategic sectors for a low-carbon economy.

The purpose of the scheme is to support investments for the production of strategic equipment (such as batteries, solar panels, wind turbines, heat-pumps, electrolysers, and carbon capture usage and storage), as well as key components and critical raw materials necessary for their production.

The aid will take the form of direct grants and will be accessible to enterprises of all sizes.

The Commission found that the Czech scheme aligns with the conditions of the TCTF. Specifically, the aid will (i) respect the maximum aid ceilings; (ii) incentivize the production of relevant equipment for the transition to a climate-neutral economy; and (iii) be granted no later than 31 December 2025.

The Commission concluded that the Czech scheme is necessary, appropriate, and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are important for the implementation of the Clean Industrial Deal, in line with Article 107(3)(c) of the Treaty on the Functioning of the EU and the conditions of the TCTF.

On this basis, the Commission approved the aid measure under EU State aid rules.

Background

On 9 March 2023, the Commission adopted the TCTF to promote support measures in sectors critical for the transition to a low-carbon economy.

The TCTF provides for the following types of aid, which can be granted by Member States until 31 December 2025 to accelerate the green transition:

• Measures accelerating the rollout of renewable energy (section 2.5). Member States can set up schemes for investments in all renewable energy sources, with simplified tender procedures.
• Measures facilitating the decarbonisation of industrial processes (section 2.6). Member States can support investments in the decarbonisation of industrial activities to reduce dependency on imported fossil fuels, particularly through electrification, energy efficiency, and the switch to the use of renewable and electricity-based hydrogen, which complies with certain conditions, with expanded possibilities to support the decarbonisation of industrial processes switching to hydrogen-derived fuels.
• Measures to further accelerate investments in key sectors for the transition towards a low-carbon economy (section 2.8). Member States can grant investment support for the manufacturing of strategic equipment (such as batteries, solar panels, wind turbines, heat-pumps, electrolysers, and carbon capture usage and storage), as well as for the production of key components and for the production and recycling of related critical raw materials. Support is capped at a certain percentage of the investment costs up to specific amounts, depending on the location of the investment and the size of the beneficiary. Higher support is possible for small and medium-sized companies, as well as companies located in disadvantaged regions to ensure that cohesion objectives are duly taken into account. Furthermore, in exceptional cases, Member States may provide higher support to individual companies, where there is a real risk of investments being diverted away from Europe, subject to a number of safeguards.

More information on the TCTF can be found here.

The non-confidential version of todays decision will be made available under the case number SA.117292 in the State aid register on the Commissions competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.