European Commission: Commission approves €1.1 billion Austrian scheme to support companies facing increased energy costs in context of Russia’s war against Ukraine

The European Commission has approved a €1.1 billion Austrian scheme to support companies facing increased energy costs in the context of Russia’s war against Ukraine. The scheme was approved under the State aid Temporary Crisis Framework, adopted by the Commission on 23 March 2022 and amended on 20 July 2022 and on 28 October 2022, based on Article 107(3)(b) of the Treaty on the Functioning of the European Union (‘TFEU’), recognising that the EU economy is experiencing a serious disturbance.

The Austrian measure

Austria notified to the Commission, under the Temporary Crisis Framework, a €1.1 billion scheme to support companies facing increased energy costs in the context of Russia’s war against Ukraine.

The measure will be open to (i) companies with an annual turnover below €700,000; and (ii) to energy-intensive businesses.

The measure aims at covering part of the additional energy costs linked to exceptionally severe increases in natural gas and electricity prices.

Under this measure, which will be administered by the Austrian Promotional Bank, the aid will take the form of direct grants up to €400,000 per company and up to €2 million for energy intensive businesses. Furthermore, the latter are eligible for increased support under the measure if they have incurred operating losses, up to €25 million (and up to €50 million if they are active in particularly affected sectors). The scheme will run until 30 June 2023 and will cover energy costs incurred by the beneficiaries between 1 February and 30 September 2022.

The Commission found that the Austrian scheme is in line with the conditions set out in the Temporary Crisis Framework. In particular, the individual aid amount will not exceed 50% of the eligible costs for the maximum aid ceiling of €4 million. For beneficiaries qualifying as energy-intensive businesses, the overall aid per beneficiary will not exceed 65% of the eligible costs, or 80% for particularly affected sectors in Annex 1 or the maximum aid ceiling of €50 or €150 million respectively. In addition, the aid will be granted before 31 December 2023.

Furthermore, the public support will come subject to conditions to limit undue distortions of competition, including safeguards to ensure that companies benefiting from higher aid amounts and intensities implement the recommendations of mandatory energy audit reports.

The Commission concluded that the Austrian scheme is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Crisis Framework.

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