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Carole Maczkovics

Carole Maczkovics has developed a cutting-edge expertise in State aid law, with a strong background in the economic regulation of network industries (energy and transport) and in public contracting (EU subsidies, public procurement, concessions).

Carole has a proven track record of advising public and private entities, which she successfully represents in administrative and judicial proceedings on complex State aid and regulatory matters before the European Commission as well as before the Belgian and European courts. She also assists clients with the application of the new EU Foreign Subsidy Regulation and UK subsidy control regime.

Carole has published many articles on State aid law and on regulated network industries, and contributes to conferences and seminars on a regular basis. She is a visiting lecturer at King’s College London and at the Brussels School of Competition on the application of regulation and competition law (including State aid) in the railway sector. Carole gives trainings on State aid law at EFE, in Paris. She has been recently appointed as Academic Director of the European State aid Law Institute (EStALI).

On 23 May 2024, the EU’s Critical Raw Materials Act (“CRMA”) entered into force.  The Regulation’s adoption within just one year after it was first proposed in March 2023 signals the EU’s political commitment to strengthen Europe’s strategic autonomy on the supply of Strategic Raw Materials (“SRMs”) and the broader category of “Critical Raw Materials” (“CRMs”).   

Here are the key takeaways for companies:

  • The CRMA sets non-binding capacity targets within the EU for the extraction, processing, refining, and recycling of SRMs that are key to achieve the green and digital transition.
  • To reach such targets, the CRMA empowers the European Commission (“the Commission”) to recognize projects that extract, process, refine or recycle SRMs, including projects outside the EU, as Strategic Projects (“SPs”) so that they may benefit from easier access to financing, expedited permitting process, and matchmaking with off-takers.  The Commission is expected to recognize the first SPs by the end of 2024.
  • The Commission must monitor disruption risks and propose mitigation measures, if needed, to ensure a secure supply of CRMs.  To enable the Commission to do this effectively, companies may be subject to new specific obligations, such as participating in surveys, carrying out risk assessments of SRMs supply chains, mitigating possible vulnerabilities, reporting on the implementation and the financing of their SPs, labelling some products, and recycling a minimum content of permanent magnets.  
  • The Commission will also create and operate a Joint Purchasing Mechanism to aggregate the demand of interested EU off-takers consuming SRMs and seek offers from suppliers to match that aggregated demand.

Critical and Strategic Raw Materials and Capacity Targets

SRMs are indispensable raw materials for strategic sectors that facilitate transition to a greener, digital economy.  They are characterized by high forecasted demand growth and significant challenges in scaling up production in Europe to meet such demand.  Annex I to the CRMA lists 17 SRMs, including copper, gallium, lithium, manganese, and titanium metal.Continue Reading The EU Critical Raw Materials Act enters into force

What You Need to Know.

  • With a focus on multilevel action, urbanization, and the built environment and transport, the events of Day 7 of COP28 highlighted efforts to transition to low-carbon and resilient infrastructure, particularly in urban areas.  This thematic focus is significant; according to the UN Environmental Programme, cities are responsible for an estimated 75 percent of global CO2 emissions, primarily from transportation and buildings.

Continue Reading COP28 Day 7 Recap: “A Bullet Train to Speed Up Climate Action”

On 10 July 2023, the European Commission (the “Commission”) adopted the Implementing Regulation (“IR”) for the European Union (“EU”) Foreign Subsidies Regulation (“FSR”). The FSR, which starts to apply today, 12 July 2023, creates a new instrument designed to prevent foreign subsidies from distorting the EU internal market (see our blog). The objective is to level the playing field within EU markets between companies subject to scrutiny under the EU State aid rules and companies receiving subsidies from non-EU Member States.

To attain this objective, the FSR empowers the Commission to assess foreign subsidies either on its own motion or after the notification of concentrations or public procurement tenders in the EU where certain thresholds are exceeded. Foreign subsidies are financial contributions (i.e. any value transfer) granted by non-EU countries, or entities whose action can be attributed to a non-EU country (i.e. foreign financial contributions or “FFC”) that confer a benefit that is not available on the market, specifically to one or to several companies or industries. Where foreign subsidies are problematic, this assessment may lead to remedies and even to the prohibition of the concentration or of the award of a public contract. Although the FSR starts to apply on 12 July 2023, allowing the Commission to investigate foreign subsidies on its own motion, the notification obligations only kick in on 12 October 2023. That means that notification may be requested for transactions signed after 12 July but not closed by 12 October and for public procurement procedures initiated after 12 July.

The purpose of the IR is to set out the rules applicable to proceedings conducted by the Commission under the FSR, including the submission of notifications.

Key things you need to know about the IR and the notification obligations:

  • The IR enacts the forms that notifying parties will have to complete and submit to the Commission in the context of concentrations and public procurement tenders.
  • The Commission must review foreign subsidies within statutory time limits that start to run as soon as the notification is complete and that may be suspended to obtain further information.
  • Detailed information must be submitted for FFCs that are considered to fall into the most distortive categories of foreign subsidies, whereas aggregate information must be provided for most other FFCs.
  • Information must be provided for FFCs provided to all group entities of the party or parties involved.
  • Companies that are likely to be involved in large concentrations or public procurements would be well advised to prepare sufficiently well in advance to avoid delays in their clearance timeline.

Continue Reading The EU Foreign Subsidies Regulation starts to apply – what you need to know about the notification obligations

As part of “A Green Deal Industrial Plan for the Net Zero Age” to respond to the US Inflation Reduction Act (IRA) (see our alert), the European Commission (the “Commission”) adopted on 9 March 2023 its Temporary Crisis and Transition Framework for State Aid measures to support the economy following the aggression against Ukraine by Russia (the “TCTF”). The text amends the Temporary Crisis Framework last amended on 28 October 2022 (see our blog). 

These are the three most important things you need to know about the TCTF:

  • To avoid that an investment would be located outside the European Economic Area (EEA), EU countries may support investments in the manufacturing of relevant equipment for the transition towards a net-zero economy, such as batteries, solar panels, wind turbines, heat pumps, carbon capture usage and storage (CCUS), as well as their key components and critical raw materials necessary for their production. They may even grant aid matching foreign subsidies to support those investments, provided that they are located in the poorer areas of the EU.
  • EU countries’ possibilities to grant aid for accelerating the rollout of renewable energy are extended to any renewable technologies, including hydropower, and no longer require a bidding process to select the aided projects that are considered as less mature.
  • The TCTF is not a subsidy program, and it is up to EU Member States to provide public funding.

Aid to cover investment costs for the production of relevant equipment for the transition towards a net-zero economyContinue Reading The Commission adopts its Temporary Crisis and Transition Framework relaxing State aid rules as a response to the US Inflation Reduction Act

European Union (“EU”) Foreign Subsidies Regulation (“FSR”), a new state aid instrument adopted at the end of 2022, will have a significant impact on transactions in the EU. The FSR impacts any company that is present in or wants the enter the EU, and has received financial support in any form from non-EU governments. 

The FSR is game-changing — it imposes notification obligations on companies on subsidies received from non-EU countries and, when those subsidies are considered to distort the internal market in the EU, the European Commission (“EC”) can impose remedies.

Companies will now have notification obligations if they have received foreign financial contributions above a certain amount and are:

(1)    acquiring a company that has a turnover of at least EUR 500 million in the EU, or

(2)    participating in a public tender with a value of EUR 250 million.

These notification obligations will start to apply on 12 October 2023.Continue Reading EU Foreign Subsidies Regulation – Key Takeaways

Regulation (EU) 2022/2560 of the European Parliament and of the Council of 14 December 2022 on foreign subsidies distorting the internal market (FSR) entered into force on 12 January 2023 and will start to apply as of 12 July 2023.

The FSR creates a brand new instrument to fill a regulatory gap, by preventing foreign subsidies from distorting the European Union (EU) internal market. Whereas companies receiving public support in the EU are subject to strict State aid rules, companies obtaining public support outside the EU are generally not. This was perceived as putting companies in the EU at a disadvantage compared to companies that obtained subsidies outside the EU, but that also engaged in economic activity in the Union.

The FSR’s scope extends far beyond the obvious State support, to cover common types of benefits that are granted all over the world, including in countries driven by a market economy. Its obligations will inevitably place an additional administrative burden on companies engaging in an economic activity in the EU. Acceptance of a foreign subsidy distorting the EU internal market may have far-reaching consequences for the company. The FSR places additional compliance obligations on companies, and for many will entail a thorough assessment to identify and justify foreign subsidies received. For companies considering transactions in the EU, the FSR effectively creates a third layer of deal conditionality, besides merger control and Foreign Direct Investment laws. This is adding a further unique set of thresholds, timings and factual considerations, to be included in companies’ strategies to invest in the EU. This will require expertise in EU antitrust and State aid law, and a good understanding of the details of the FSR.

Key things you need to know:Continue Reading The EU Foreign Subsidies Regulation enters into force

On 19 October 2022, the European Commission (the “Commission”) adopted its new State aid Framework for research, development and innovation (the “2022 RDI aid Framework”). This instrument governs Member States’ investment in RDI activities. It is an important response to the 2020 Commission Communication on a new European Research Area for Research and Innovation (the “ERA Communication”), aiming at strengthening investments and reaching a 3% GDP investment target in the field of RDI. The 2022 RDI aid Framework is a revision of the previous version of 2014.

The three most important things you need to know about the 2022 RDI aid Framework are:

  • The Commission’s approval is subject to a set of criteria to determine whether the aid is justified and can be authorised, and compliance with recent EU objectives such as the EU Green Deal and the EU Industrial and Digital Strategies will have a positive influence on the Commission’s assessment;
  • RDI activities now explicitly include digitalisation and digital technologies; and
  • Member States can grant aid for testing and experimentation infrastructures which predominantly provide services to undertakings for R&D activities closer to the market.

Background

Similarly to its previous version, the 2022 RDI aid Framework recalls the instances where RDI aid does not qualify as a State aid and is therefore not caught by the State aid rules. This would be the case where the aid is granted to non-economic activities conducted by universities or where universities, although publicly funded, engage in RDI activities with companies pursuing commercial goals.Continue Reading The Commission has revised its framework for State aid for research and development and innovation

On 28 October 2022, the European Commission (the “Commission”) adopted the  second amendment to its Temporary Crisis Framework for State Aid measures to support the economy following the aggression against Ukraine by Russia (the “Framework”). The second amendment to the Framework extends its duration by one year until 31 December 2023.

The four most important things you need to know about this amendment are:

  • Maximum aid amounts have been increased;
  • Guarantees or subsidised interests can now cover larger amounts of loans when taken by large energy utilities companies that provide financial collateral for trading activities on energy markets. Exceptionally, guarantees can also be provided as unfunded financial collateral directly to central counterparts or clearing members to cover the liquidity needs of energy companies, to clear their trading activities on energy markets;
  • To achieve the EU targets of reducing electricity consumption in response to high energy prices, Member States may provide compensation for genuine reductions in electricity consumption; and
  • State recapitalisations are not subject to detailed rules as under the COVID-19 Temporary Framework, however the Commission highlights the general principles it will use to assess them on a case-by-case basis. 

Continue Reading The Commission prolongs and amends its Temporary Crisis Framework relaxing State aid rules to support the economy following the aggression against Ukraine by Russia

On 6 October 2022, the Council of the European Union adopted a Regulation on an emergency intervention to address high energy prices (the “Regulation”).  The Regulation was published in the Official Journal of the European Union on 7 October. The Regulation has three main elements:

  1. A requirement to reduce electricity consumption by 5% in peak hours;
  2. A measure to return the excess revenues or profits of energy companies to the individual Member States; and
  3. The allocation of proceeds to customers to alleviate retail electricity prices and an extension to Small and Medium-sized Enterprises (SMEs) of the categories of beneficiaries of a possible Member State intervention in the retail price.

The Regulation’s market intervention is exceptional (albeit in response to an extraordinary geopolitical market disruption).  It will have widespread positive and negative impacts for energy market sellers and buyers.  These circumstances may provoke a range of disputes, transaction (re)structurings or additional compliance obligations that will require expert advice and understanding of the details of the Regulation.

Reduction in electricity consumption

EU Member States will endeavour to reach an overall 10% reduction in electricity consumption by all consumers.  The benchmark against which that reduction will be measured is the average of gross electricity consumption in the corresponding months of the reference period, i.e. from 1 November to 31 March in the five preceding years, starting from 2017.  In addition, in order to reduce retail prices and improve supply security, Member States are obliged to deliver a 5% reduction of electricity consumption during peak hours, (defined as the hours of the day where day-ahead wholesale electricity prices are expected to be the highest; gross electricity consumption is expected to be the highest; or gross consumption of electricity generated from sources other than renewable sources is expected to be the highest).  These measures will apply from 1 December 2022 until 31 March 2023.Continue Reading EU Emergency Action on Energy

 On 30 June 2022, the Council of the EU (the “Council”) and the European Parliament (the “Parliament”) reached a much awaited agreement on the proposal of the European Commission (the “Commission”) for the Regulation on foreign subsidies distorting the internal market (the “FSR”) (see our alert on the proposal). This political agreement swiftly concludes the trilogue discussions initiated in the beginning of May this year, after the Council (see our blog post) and the Parliament (see our blog post) each adopted their own positions. The agreement has been approved by the Permanent Representatives Committee (“COREPER”) of the Council on 13 July and the Committee on International Trade of the European Parliament on 14 July.

The FSR grants substantial new powers to the Commission and “will help close the regulatory gap whereby subsidies granted by non-EU governments currently go largely unchecked”, according to remarks from Executive Vice-President of the Commission, Margrethe Vestager. It will be deeply transformative for M&A and public procurement in the EU.

The agreement on the FSR did not lead to any major changes in the proposal made by the Commission. The most notable points of discussion between the Parliament and Council and the outcome of this agreement are:

  • The thresholds above which companies are obliged to inform the Commission about their foreign subsidies remain unchanged compared to the Commission’s proposal;
  • The time period in which the Commission has to investigate foreign subsidies in large public procurement has been reduced. In the same way, the retroactive application of the FSR has been limited to foreign subsidies granted in the five years prior to the application of the regulation;
  • The Commission will issue guidelines on the existence of a distortion, the balancing test and its power to request notification of non-notifiable transactions, at the latest three years after the entry into force of the FSR; and
  • A commitment to a multilateral approach to foreign subsidies above the FSR and the possibility for the Commission to engage in a dialogue with third countries has been included.

Continue Reading The Council of the EU and the European Parliament agree on the Foreign Subsidies Regulation