The European Commission has set out a proposal to clarify and streamline the regulation of state support for research and innovation activities.
The European Commission has launched a public consultation inviting all interested parties to comment on a proposed revision of the State aid Framework for research, development and innovation (RDI). The framework sets out the conditions under which State aid for such activities may be considered compatible with fair competition within the Internal Market. In this way, it enables Member States to provide the necessary incentives to companies and the research community to carry out activities and investments in this field that are key to economic development.
State aid is defined in the EU’s foundational treaty as any state spending that potentially distorts trade between Member States. Undertakings by national public authorities that confer advantages in the marketplace in any selective way (e.g. specific tax advantages to a subset of businesses) are subject to restrictions unless there is an appropriate justification in terms of general economic development, a rationale often at play in support for RDI activities. The proposed revision of the RDI State aid framework follows an assessment of the current Framework, conducted as part of the State Aid Fitness Check reviewing the EU competititon framework as announced in the EU industrial strategy presented in early 2020.
Although this study judged that the current provisions of the RDI State aid Framework work well overall, it also showed that some targeted adjustments may be necessary. These could be clarified, better reflect the latest regulatory, economic and technological developments, and better aligned to the Commission’s new strategic priorities, such as the European Green Deal and the EU’s Digital Strategies. This has led the Commission to propose a number of targeted changes, including a clarification of definitions, new measures supporting investment in technology infrastructures, and simplifying rules.
The proposed update of the existing definitions of research and innovation activities eligible for support serves mainly to clarify their applicability with respect to digital technologies and activities related to digitalisation. This will provide legal certainty to Member States and stakeholders, while facilitating RDI investments enabling the digital transformation of companies in the EU. Secondly, the new provisions targeting support for technology infrastructures serves to speed up the development of innovative technologies by SMEs and thereby facilitating the green and digital transitions. The infrastructures at issue include facilities such as testing labs, equipment, capacities and support services that serve to help companies develop, test, and upscale technology. Lastly, the proposed simplification of rules should facilitate the practical application of the RDI framework, by easing administrative burdens on actors and simplifying the methodology for determining eligible costs.
Interested parties can respond to the consultation for eight weeks, until 3 June 2021 and the adoption of the new RDI Framework is foreseen for the second half of 2021. The provisions of the RDI State aid Framework are complemented by the General Block Exemption Regulation (“GBER”), which lays down ex ante compatibility conditions on the basis of which Member States can implement State aid measures without prior notification to the Commission. A temporary framework, put in place to mitigate the socio-economic impact of the coronavirus outbreak, has also been used by many Member States to allow for economic supporting measures related to RDI (see SwissCore article).