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Carole Maczkovics has developed a cutting-edge expertise in State aid law, regulation of network industries and public contracts (including subsidies, public procurement, concessions, and management contracts) with the Belgian and European authorities.

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, public procurement and regulatory issues before the European Commission as well as before the Belgian and European courts.

She has published many articles on State aid law and on network industries, and contributes to conferences and seminars on a regular basis.

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

On 30 May 2022, the European Union (“EU”) adopted the revised Regulation on guidelines for trans-European energy infrastructure (No. 2022/869) (the “TEN-E Regulation 2022”), which replaces the previous rules laid down in Regulation No. 347/2013 (the “TEN-E Regulation 2013”) that aimed to improve security of supply, market integration, competition and sustainability in the energy sector. The TEN-E Regulation 2022 seeks to better support the modernisation of Europe’s cross-border energy infrastructures and the EU Green Deal objectives.

The three most important things you need to know about the TEN-E Regulation 2022:

  • Projects may qualify as Projects of Common Interest (“PCI”) and be selected on an EU list if (i) they fall within the identified priority corridors and (ii) help achieve EU’s overall energy and climate policy objectives in terms of security of supply and decarbonisation. The TEN-E Regulation 2022 updates its priority corridors to address the EU Green Deal objectives, while extending their scope to include projects connecting the EU with third countries, namely Projects of Mutual Interest (“PMI”).
  • PCIs and PMIs on the EU list must be given priority status to ensure rapid administrative and judicial treatment.
  • PCIs and PMIs will be eligible for EU financial assistance. Member States will also be able to grant financial support subject to State aid rules.


Continue Reading The European Union adopted new rules for the Trans-European Networks for Energy

On 4 May 2022, the Council of the EU (the “Council”) formally adopted its position on the proposal of the European Commission (the “Commission”) for a Regulation on foreign subsidies distorting the internal market (the “Foreign Subsidies Regulation”) (see our alert on the proposal). On the same day, the European Parliament (the “Parliament”) also adopted its position on the Foreign Subsidies Regulation (see our blog post). The Council’s adoption confirms the Commission’s initial proposal of the regulation while seeking to limit the Commission’s power to investigate foreign subsidies.

The three most important things for you to know about the recent amendments to the Foreign Subsidies Regulation:

  • The thresholds above which companies are obliged to inform the Commission about their foreign subsidies have been increased, reducing the scope of the new rules to a narrower set of acquisitions, mergers and public procurements. In addition, foreign subsidies of less than EUR 5 million would not be subject to notification and foreign subsidies of less than EUR 200,000 would escape any scrutiny.  
  • The time period in which the Commission has to investigate foreign subsidies in large public procurements has been reduced. Furthermore, the “retroactive” application of the Foreign Subsidy Regulation is limited to foreign subsidies granted in the five years prior to the application of the regulation.
  • The application of some concepts (e.g., the power to request prior notification) will be subject to further guidance by the Commission.


Continue Reading The Council of the EU endorses the European Commission’s proposal on the Foreign Subsidies Regulation

On 28 April 2022, the Subsidy Control Bill (the “Bill”) received Royal Assent, becoming the Subsidy Control Act 2022 (the “Act”).  The Act lays the basic framework for the new UK-wide subsidy control regime, which is now expected to come into force in Autumn 2022.  Although the Act primarily addresses UK public authorities and their

On 4 May 2022,  the European Parliament (the “Parliament”) adopted its position on the proposal of the European Commission (the “Commission”) for a Regulation on foreign subsidies distorting the internal market (the “Foreign Subsidies Regulation”) (see our alert on the proposal). It confirms the Commission’s powers to investigate and remedy the potential negative effects of

On 23 March 2022, the European Commission (the “Commission”) adopted a Temporary Crisis Framework for State Aid measures to support the economy following the aggression against Ukraine by Russia (the “Framework”). In a similar fashion to the temporary framework that the Commission has adopted to address the COVID-19 outbreak (the “COVID-19 Temporary Framework”), and earlier,

Introduction

The European Commission (the ‘Commission’) formally adopted on 27 January 2022 its new Guidelines on State aid for climate, environmental protection and energy (‘CEEAG’). The CEEAG replace the guidelines which were in force since 2014 (EEAG) and integrate the new objectives of the EU Green Deal of a reduction of 55% net greenhouse gas emissions compared to the 1990 levels by 2030 and of carbon neutrality by 2050. The Commission has estimated that achieving the new 2030 target would require EUR 390 billion of additional annual investment compared to the levels in 2011-2020, an investment that cannot be borne by the private sector alone, and would therefore require public investments.

Application

The CEEAG apply from 27 January 2022 to aid for environmental protection, including climate protection, and energy that is awarded or intended to be awarded as of that date. Member States must also adapt their existing support schemes to comply with the CEEAG by 2024. The CEEAG set out the criteria under which the Commission will assess whether aid may be authorised. These assessment criteria relate to a positive condition, i.e. whether the aid facilitates the development of certain economic activities within the Union, and a negative condition, i.e. whether such aid does not adversely affect trading conditions to an extent contrary to the common interest.

The Commission will only assess the aid under the CEEAG in the situations where the aid does not already fall under the exemptions of the General Block Exemption Regulation (GBER). The GBER allows aid under certain ceilings without the need for Commission’s scrutiny. It is noteworthy that the GBER is currently under revision to align with the European Green Deal objectives and to complement the CEEAG.
Continue Reading The Commission adopts its new Climate, Energy and Environmental Aid Guidelines (CEEAG)