State aid: Commission adopts revised State aid Framework for research, development and innovation

The European Commission has adopted a revised Communication on State aid rules for research, development and innovation (‘2022 RDI Framework’), which sets out the rules under which Member States can grant State aid to companies for RDI activities, while ensuring a level playing field. The 2022 RDI Framework, which contributes to the EU’s strategic objectives relating to the green and digital transitions, has entered into force on 19 October.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The revised State aid framework adopted today will make it easier for Member States to support research, development and innovation, including by small and medium-sized companies, while ensuring that possible competition distortions are kept to the minimum. The targeted changes introduced to our rules will support Europe’s green and digital transitions by facilitating public-private investment in breakthrough innovation and research, as well as testing and experimentation infrastructures.”

The revised RDI Framework

The adoption of the 2022 RDI Framework follows an evaluation of the existing rules launched in 2019 as part of the State aid Fitness Check. The Commission has also carried out an extensive consultation of all interested parties on the proposed revised text of the Communication. This included contributions from Member States, business and research associations, interest groups and companies, NGOs, and citizens.

The revised RDI Framework includes a number of targeted adjustments (i) to simplify and reflect the experience gained from the application of the 2014 RDI Framework, (ii) to reflect regulatory, economic and technological developments, and (iii) to align the relevant rules to the current EU policy priorities, such as the European Green Deal and the Industrial and Digital Strategies. In particular, the targeted amendments:

• Update the existing definitions of research and innovation activities eligible for support under the RDI Framework. In particular, the amendments clarify their applicability with respect to digital technologies and activities related to digitalisation (e.g. super-computing, quantum technologies, block chain, artificial intelligence, cyber security, big data and cloud or edge computing). This aims at providing legal certainty to Member States and stakeholders, while facilitating RDI investments that will enable the digital transformation in the EU.
• Enable public support for testing and experimentation infrastructures required to develop, test and upscale technologies. This aims at further enabling the swift development and eventual deployment of cutting edge and breakthrough technologies, in particular by small and medium-sized enterprises, while facilitating the green and digital transition of the EU economy, and contributing to the new European Innovation Agenda.

EU innovation performance continues to improve

• Simplify certain rules in order to facilitate the practical application of the RDI Framework and to alleviate possible excessive administrative burden for companies and public authorities. For example, the new rules introduce a simplified mechanism to determine the indirect costs of research and development projects that are eligible for support under State aid rules.

At the same time, the 2022 RDI Framework maintains safeguards to ensure that aid is limited to what is necessary and does not lead to undue distortions of competition.

Background

The RDI Framework aims at facilitating research, development and innovation activities, which, due to market failures, would not occur in the absence of public support. It enables Member States, subject to certain conditions, to provide the necessary incentives to companies and the research community to carry out these important activities and investments in this field. The RDI Framework applies the principle of technological neutrality and thus relates to all technologies, industries and sectors to ensure that the rules do not prescribe in advance which research paths would result in new solutions for innovative products, processes and services.

The provisions of the RDI Framework are complemented by the General Block Exemption Regulation, which lays down ex ante compatibility conditions on the basis of which Member States can implement State aid measures without prior notification to the Commission.

Source: Press release – European Commission