Green investments to benefit from more flexible funding rules
The European Union's ambitious climate goals will require significant investments in energy and environmental projects. Considering the substantial budgets made available by the EU to support these through various funding programmes, and the stringency of the climate objectives, the European Commission has reviewed the funding rules so that financial support can be obtained more easily and with fewer obstacles.
27 January marked the entry into force of the new Climate, Energy and Environmental Aid Guidelines, also known as CEEAG. The guidelines represent a rulebook for awarding public support to large-scale private investments in energy or environment projects. They include a number of important elements to incentivise and remove barriers for projects that will help the EU reach its climate targets.
New categories of investments that can be financed have been introduced, such as aid for:
energy and environmental performance of buildings
Another change relates to the simplification of the State aid approval procedure for large projects involving several types of State aid.
Under the previous rules, a greenhouse gas emission removal project making use of renewable energy had to undergo two different approval processes as it required different categories of State aid for its sub-components. Under the new CEEAG, the procedure has now been integrated and simplified.
Smaller scale projects will also benefit
The rules for approving State aid for projects below certain thresholds – the General Block Exemption Regulation or GBER - are also being amended to simplify it and make it more flexible. The revised GBER rules, expected during the first half of 2022, are likely to further facilitate green projects by introducing aid for investment in new technologies, such as hydrogen and carbon capture storage and usage, resource efficiency and biodiversity. Increased flexibility is also expected for eligible costs and aid intensities.
These two sets of rules – CEEAG and GBER – will influence the support for projects under multiple funding programmes, from the Modernisation Fund to the Recovery and Resilience Facility or European Structural and Investment Funds.
With over €1 trillion injected by the European Union under the combined Recovery and Resilience package and Cohesion package until 2027, understanding the financing mechanisms is key to making the best use of the available support.
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