Daily News 04 / 08 / 2023

State aid: Commission approves amendment to Dutch scheme to support rail network interoperability

The European Commission has approved, under EU State aid rules, an amendment to a Dutch scheme to promote the shift of freight transport from road to rail.

The scheme was originally approved by the Commission in November 2019 (SA.55451), to support the upgrade of traffic management equipment on freight locomotives in the Netherlands, by installing the latest available version of the European Railway Traffic Management System (‘ERTMS'). The ERTMS is a single European railway management and safety control system, aimed to replace the different national systems currently in operation throughout Europe, to enhance cross-border rail interoperability and to improve the competitiveness of rail transport.

The Netherlands notified the Commission of its intention to amend the scheme by increasing its budget by €21 million, bringing the total budget to €67 million, including funding from the Connecting Europe Facility. The budget increase allows for more vehicles to be upgraded and also compensates their owners for the duration of the installation process, during which the vehicles cannot be used commercially. Aid will take the form of direct grants and the duration of the amended scheme remains unchanged, running until 31 December 2023.

The Commission assessed the amended scheme under EU State aid rules, in particular  Article 93 of the Treaty on the Functioning of the European Union (‘TFEU') on transport coordination, and the 2008 Commission Guidelines on State aid for railway undertakings. The Commission found that the Dutch scheme, as amended, remains necessary to promote the use of rail transport, which is less polluting than road transport and contributes to reducing road congestion, in line with the objectives of the EU Sustainable and Smart Mobility Strategy and of the European Green Deal. Furthermore, the Commission found that the aid will have an 'incentive effect' as the beneficiaries would not carry out the investment to the same extent in the absence of the public support. Finally, the Commission concluded that the scheme remains proportionate, as it is limited to the minimum necessary, and has a limited impact on competition and trade between Member States. On this basis, the Commission approved the amendment under EU State aid rules.

The non-confidential version of the decision will be made available under the case number SA.104642 in the State aid register on the Commission's Competition website once any confidentiality issues have been resolved.

(For more information: Arianna Podesta – Tel.: +32 2 298 70 24; Nina Ferreira - Tel.: +32 2 299 81 63)

State aid: Commission approves €176 million Polish scheme to support companies in the context of Russia's war against Ukraine

The European Commission has approved an approximately €176 million (PLN 780 million) Polish scheme to support companies in the context of Russia's war against Ukraine. The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on 9 March 2023 to support measures in sectors which are key to accelerate the green transition and reduce fuel dependencies. The new Framework amends and prolongs in part the Temporary Crisis Framework, adopted on 23 March 2022 to enable Member States to support the economy in the context of the current geopolitical crisis, already amended on 20 July 2022 and on 28 October 2022.

The aid, which will take the form of subsidies on loan interest rates, will be available to companies active in the trading or purchasing of cereals, trading of agricultural plant seeds, or the purchasing or freezing of soft fruit. The measure will be open to small and medium-sized companies. There will be over 1,000 beneficiaries under the scheme.

The purpose of the measure is to provide assistance to beneficiaries that are currently facing liquidity shortages caused by the current geopolitical crisis.

The Commission found that the Polish scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework. In particular, the aid (i) will not exceed €2 million per beneficiary; and (ii) will be granted no later than 31 December 2023. The Commission concluded that the 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 and Transition Framework.

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

More information on the Temporary Crisis and Transition Framework and other actions taken by the Commission to address the economic impact of Russia's war against Ukraine and foster the transition towards a net-zero economy can be found here. The non-confidential version of the decision will be made available under the case number SA.108355 in the State aid register on the Commission's competition website once any confidentiality issues have been resolved.

(For more information: Arianna Podesta – Tel.: +32 2 298 70 24; Nina Ferreira - Tel.: +32 2 299 81 63)

Mergers: Commission clears acquisition of Kensa by Octopus Energy and LGC

The European Commission has approved, under the EU Merger Regulation, the acquisition of joint control of Kensa Group Limited (‘Kensa'), by Octopus Energy Group Limited (‘Octopus Energy') and Legal & General Capital Investiments Limited (‘LGC') all three of the UK.

Kensa, which is solely controlled by LGC, manufactures and provides ground-source heat pumps and accessories. Octopus Energy generates and supplies renewable energy to consumer and commercial customers. LGC is an investment company active in various sectors, including clean energy and specialist commercial real estate.

The Commission concluded that the proposed acquisition would raise no competition concerns, given that Kensa has almost no actual or foreseen activities within the European Economic Area. The transaction was examined under the simplified merger review procedure.

More information is available on the Commission's competition website, in the public case register under the case number M.11188.

(For more information: Arianna Podesta – Tel.: +32 2 298 70 24; Marta Pérez-Cejuela – Tel.: +32 229 63770)

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