Italian industries are on the verge of a significant leap in their transformative journey towards low-carbon economy, thanks to the European Commission’s approval of a €1.1 billion state aid scheme.
This expansive initiative has been established with the aim of invigorating investments into critical equipment production needed for the transition to a green economy, conforming with the directives of the Green Deal Industrial Plan.
The funding originates from the State aid Temporary Crisis and Transition Framework whose creation by the Commission on March 9, 2023, was marked by a subsequent extension on November 20, 2023. This framework underlines the significance of boosting sectors that are fundamental to promoting the green transition and reducing fossil fuel dependencies.
Following the guidelines of the Temporary Crisis and Transition Framework, Italy declared a €1.1 billion scheme expressly designed to stimulate investments in the productions of sophisticated equipment, integral components, and vital raw materials pivotal for the development of a net-zero economy.
The state aid will be allocated in the form of direct grants, primarily financed through the Recovery and Resilience Facility (RRF). Depending on the geographical location of the beneficiaries and the nature of the area’s aid eligibility under Article 107(3)(c) and Article 107(3)(a) TFEU, the maximum aid amount will range from €150 million up to €350 million.
The scheme presents a window of opportunity for companies that manufacture essential equipment like batteries, solar panels, wind turbines, heat pumps, and electrolysers. Moreover, it extends to those involved in producing equipment for carbon capture usage and storage. In addition, companies that manufacture key components functioning as direct inputs for such equipment production, and those that produce related critical raw materials, will also benefit from the measure.
The Commission has endorsed the Italian scheme, establishing that it aligns perfectly with the Temporary Crisis and Transition Framework. This approval stems from the fact that the aid incentivizes the production of fundamental equipment for the net-zero economy transition and that it is scheduled to be disbursed no later than December 31, 2025.
The Commission discerns that the approval of this scheme is quintessential to hastening the green transition and nurturing certain economic activities essential for the Green Deal Industrial Plan’s implementation. This move, sanctioned under EU State aid rules, is a testament to Italy’s commitment towards a sustainable future. Importantly, the aid scheme underscores the concerted efforts being taken across Europe to meet its greenhouse gas emissions targets, placing the continent in a strategic position to gain a competitive edge in the global green technology market.
