De minimis aid for services of general economic interest (from 2024)

SUMMARY OF:

Commission Regulation (EU) 2023/2832 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid granted to undertakings providing services of general economic interest

Article 107 of the Treaty on the Functioning of the European Union (TFEU)

Article 106(2) TFEU

Article 108 TFEU

WHAT IS THE AIM OF THE REGULATION?

Article 107(1) of the Treaty on the Functioning of the European Union (TFEU) sets out which measures constitute State aid.

Article 108(3) TFEU requires, as a general principle, State aid to be notified to the European Commission so that it can assess whether the aid is compatible with the single market.

The regulation applies specifically to aid for businesses providing services of general economic interest (SGEIs) within the meaning of Article 106(2) TFEU. It sets out the conditions that small amounts of State aid granted to SGEI providers must meet to avoid having to be notified to the Commission.

KEY POINTS

Scope

The regulation applies to aid for all businesses providing a service of general interest except for the following:

primary production of fishery, aquaculture and agricultural products;
processing and marketing of fishery, aquaculture and agricultural products where the amount of aid is fixed on the basis of price or quantity of items purchased or put on sale, or where, in the case of agricultural products, the aid is conditional on being partly or wholly passed on to primary producers;
export-related activities, such as a distribution network, to European Union (EU) Member States or non-EU countries;
use of domestic goods and services over imported ones.

De minimis aid

The following conditions apply:

Member States cannot give more than €750,000 over 3 years to a single undertaking (meaning the enterprise that receives the aid and linked enterprises); however, enterprises performing SGEI that have no relationship with each other, except for the fact that each of them has a direct link to the same public body or bodies, or to the same non-profit entity or entities, will not be treated as a single undertaking;
aid is:
- considered granted at the moment that the legal right to receive the aid is legally conferred on the business, irrespective of when it is actually paid,
- expressed as a cash grant using gross figures,
- discounted to its value when granted, if paid in several instalments;
mergers or acquisitions allow all aid approved earlier to remain valid;
aid granted to a business that subsequently splits into two or more separate entities is allocated to the entity taking over the activities for which the aid was used;
aid granted under this regulation may be added to de minimis aid permitted under other regulations;
aid granted under this regulation may not be cumulated with any compensation in respect of the same SGEI, irrespective of whether that compensation constitutes State aid or not.

Gross grant equivalent

The regulation applies only to aid the gross amount of which is clearly identifiable at the moment of granting. As a result, all aid other than grants must be precisely calculated in terms of gross grant equivalent. Known as ‘transparent’ de minimis aid, this rule applies to:

grants and interest subsidies;
loans, if the:
- beneficiary is not insolvent and, for large companies, the beneficiary has at least a B– credit rating,
- loan is secured by at least 50% collateral and amounts to a maximum of either €3,750,000 over 5 years or €1,875,000 over 10 years;
capital injections or risk finance in the form of equity or quasi-equity, if the total amount is below the €750,000 ceiling;
guarantees, if the:
- beneficiary is not insolvent and, for large companies, the beneficiary has at least a B- credit rating,
- guarantee does not exceed 80% of the loan at any moment and represents a maximum of either €5,625,000 over 5 years or €2,813,036 over 10 years,
- the gross grant equivalent is calculated on the basis of safe-harbour premiums that protect from liability or penalty, or the methodology used is appropriate and notified to the Commission before the guarantee is given;
other forms of aid, if they respect the €750,000 ceiling.

Monitoring and reporting

Member States must:

record information, such as the amount of aid granted and the beneficiary, in a publicly accessible central national or European register from 1 January 2026;
upload information within 20 working days of the aid being granted and keep it for 10 years;
verify that the €750,000 ceiling is not exceeded before approving any de minimis aid under this regulation.

Under transitional arrangements, aid granted before the regulation enters into force is permitted where certain conditions are met.

FROM WHEN DOES THE REGULATION APPLY?

It entered into force on 1 January 2024 and applies until 31 December 2030.

BACKGROUND

Article 2 of Regulation (EU) 2015/1588 (see summary) on the application of Articles 107 and 108 to certain types of State aid allows the Commission to include a de minimis rule in any regulation it adopts. This enables it to exempt small amounts of aid from EU State aid control since they are considered not to have any impact on competition or trade in the single market.

The regulation complements the general regulation on de minimis aid (Commission Regulation (EU) 2023/2831 – see summary).

MAIN DOCUMENTS

Commission Regulation (EU) 2023/2832 of 13 December 2023 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid granted to undertakings providing services of general economic interest (OJ L, 2023/2832, 15.12.2023).

Consolidated version of the Treaty on the Functioning of the European Union – Part Three – Union policies and internal actions – Title VII – Common rules on competition, taxation and approximation of laws – Chapter 1 – Rules on competition – Section 1 – Rules applying to undertakings – Article 106 (ex Article 86 TEC) (OJ C 202, 7.6.2016, pp. 90–91).

Consolidated version of the Treaty on the Functioning of the European Union – Part Three – Union policies and internal actions – Title VII – Common rules on competition, taxation and approximation of laws – Chapter 1 – Rules on competition – Section 2 – Aids granted by states – Article 107 (ex Article 87 TEC) (OJ C 202, 7.6.2016, pp. 91–92).

Consolidated version of the Treaty on the Functioning of the European Union – Part Three – Union policies and internal actions – Title VII – Common rules on competition, taxation and approximation of laws – Chapter 1 – Rules on competition – Section 2 – Aids granted by states – Article 108 (ex Article 88 TEC) (OJ C 202, 7.6.2016, pp. 92–93).

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