CISAF State Aid Framework

Section 3 — general compatibility principles and competitive bidding

State aid under Article 107(3)(c) TFEU must pursue a well-defined objective of common interest, be necessary and proportionate, and must not unduly distort competition or trade. Where aid is granted through a competitive bidding process, the selection criteria must be defined ex ante, at least 70% of the weighting must be based on environmental benefit per unit, the budget must act as a binding constraint, and ex post adjustments of the ranking must be excluded. — Reference: OJ C/2025/3602, section 3.

Section 5 — aid for industrial decarbonisation: conditions and milestones

Aid for the decarbonisation of industrial activities may take the form of direct grants, repayable advances, loans, guarantees or tax advantages, and must be based on a scheme with a budget. The aided installation or equipment must be put into operation within 60 months of the grant, and after full operation must achieve at least 80% of the expected emission reductions or energy savings; an effective penalty regime must be in place. — Reference: OJ C/2025/3602, section 5, paragraphs 133 and 136.

Section 5 — safeguards against capacity increases and mere displacement

Aid must not finance an increase in total production capacity (with a limited exception of less than 15% where technically necessary). Where an existing installation is concerned, the safe harbour requires a reduction of at least 40% of emissions, or of at least 90% at the technology-unit level without locking in fossil fuels; a newly built installation replacing an existing one must be at least 10% below the most efficient installations. Aid must not merely shift emissions, and indirect emissions may not fully offset direct reductions. — Reference: OJ C/2025/3602, section 5, paragraphs 138 and 140-143.