Commission approves €1.1 billion Italian State aid scheme to support investments in equipment necessary to foster the transition to a net-zero economy

The European Commission has approved a €1.1 billion Italian scheme to support investments for the production of equipment necessary to foster the transition towards a net-zero economy, in line with the Green Deal Industrial Plan. The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on 9 March 2023 and amended on 20 November 2023, to support measures in sectors which are key to accelerate the green transition and reduce fuel dependencies.

The Italian measure

Italy notified to the Commission, under the Temporary Crisis and Transition Framework, a €1.1 billion scheme to support investments for the production of relevant equipment, key components and critical raw materials necessary to foster the transition to a net-zero economy.

Under this measure, which will be partially funded through the Recovery and Resilience Facility (“RRF”), the aid will take the form of direct grants. The maximum aid amount per beneficiary will be €150 million, which can be increased to €200 million for beneficiaries located in regions eligible for aid under Article 107(3)(c) TFEU (so-called ‘c’ areas) and €350 million for beneficiaries located in regions eligible for aid under Article 107(3)(a) TFEU (so-called ‘a’ areas).

The measure will be open to companies producing relevant equipment, namely batteries, solar panels, wind turbines, heat-pumps, electrolysers, equipment for carbon capture usage and storage, as well as key components designed and primarily used as direct input for the production of such equipment or related critical raw materials necessary for their production.

The Commission found that the Italian scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework. In particular, the aid (i) will incentivise the production of relevant equipment for the transition towards a net-zero economy; and (ii) will be granted no later than 31 December 2025.

The Commission concluded that the Italian scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of the Green Deal Industrial Plan, in line with Article 107(3)(c) TFEU and the conditions set out in the Temporary Crisis and Transition Framework.

On this basis, the Commission approved the aid measure under EU State aid rules.