Europaudvalget 2024-25
EUU Alm.del Bilag 429
Offentligt
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MINISTER FOR INDUSTRY,
BUSINESS AND FINANCIAL
AFFAIRS
Danish comments to the Commission’s draft Clean Industrial State
Aid Framework (CISAF)
The Danish Government thanks the Commission for its efforts to draft a
new State aid regulation that builds on the experiences gained from the
Temporary Crisis and Transition Framework (TCTF), ensuring predictabil-
ity for both Member States and possible beneficiaries with temporary rules
with a longer duration than the TCTF. However, the Commission should
continuously and over the entire period monitor whether there is a need for
these temporary rules.
EU State aid rules are an important part of the regulation of the internal
market and help to ensure free and fair competition. The Danish Govern-
ment
supports effective and transparent control of State aid to ensure a level
playing field and an efficient use of taxpayers’ money.
In the geopolitical reality we are facing currently, a more robust European
competitiveness and economic security approach is crucial to maintain
prosperity and strategic autonomy in the EU. This is highlighted in the re-
ports by Enrico Letta and Mario Draghi, which put forward a number of
recommendations for improving European competitiveness with a focus on
improving innovation capacity, mobilising private investment, a strength-
ened internal market, lower energy prices, strengthened resilience and tech-
nological leadership in key strategic sectors.
To achieve this, the EU must look at all available means. Mobilising private
investments is crucial. Using State aid to promote European competitive-
ness is also part of the toolbox, although it can never stand alone and must
be accompanied by national reforms to strengthen productivity and growth.
Generally, Denmark supports the possibility of State aid measures when
targeted critical sectors or technology with a clear strategic purpose and
where there is a documented need. Denmark supports that State aid in the
current geopolitical situation can be used to ensure that investments in crit-
ical or strategic sectors for the green transition are not systematically di-
rected outside the European Union.
MINISTRY OF INDUSTRY,
BUSINESS AND FINANCIAL
AFFAIRS
Slotsholmsgade 10-12
1216 Copenhagen K
Denmark
Tlf.
+45 33 92 33 50
Fax.
+45 33 12 37 78
CVR-nr. 10092485
EAN nr. 5798000026001
[email protected]
www.em.dk
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If State aid is to be used effectively, State aid rules and procedures must
not become too complex. Therefore, Denmark welcomes the Commis-
sion’s current initiative to simplify State aid rules. Introducing temporary
rules and creating more flexibility does, however, not replace the need for
existing rules to be simplified more horizontally, for example the General
Block Exemption Regulation.
Subsidy races between Member States should be avoided. State aid can lead
to potential distortions of competition and hamper the level playing field in
the internal market. Therefore, they must only be applied were a market
failure exists, where there is a documented need and where existing regu-
lation and support options are inadequate. State aid measures should be de-
signed so that they align incentives and reduce negative effects. Clear safe-
guards to ensure proportionality and to avoid overcompensation should be
in place. This could for example be by using "claw back" mechanisms to
address windfall profits.
Denmark also welcomes that the proposal encourages Member States to
include additional conditions when designing State aid measures to serve
e.g. environmental or resilience policy objectives as long as such conditions
do not breach Union law, including Union international obligations.
Moreover, Denmark suggests, that
–
in line with the provisions in the TCTF
–
aid under CISAF cannot be granted to undertakings under sanctions
adopted by the EU or undertakings active in industries targeted by sanc-
tions adopted by the EU, insofar as the aid would undermine the objectives
of the relevant sanctions.
Denmark supports that CISAF has a more extensive duration than the
TCTF. While state aid must be temporary in nature a longer duration of
CISAF can be necessary to support the efficiency and deployment of pri-
vate capital. It will increase predictability for Member States and undertak-
ings in respect to investments related to the green transition. During the
period of its application, the Commission must monitor whether there is a
need for these temporary rules to continue to exist. Beyond December
2030, when the proposal is set to expire, we encourage the Commission to
complete an assessment on whether the experience gained from CISAF
should be used to further improve the general State aid regime. Moreover,
we find it important that schemes already approved under TCTF will not
be required to be amended, but will expire as foreseen in the State aid ap-
provals, despite the CISAF replacing the TCTF when adopted.
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We appreciate
the Commission’s efforts to collect evidence on the use of
State aid for the green transition and encourage this practice to continue.
Furthermore, we find the requirements for transparency as regards individ-
ual aid amounts above 100.000 EUR to be appropriate.
Please find below Danish comments for the specific sections of the CISAF.
Furthermore, please also find, complementing the comments below, the
Danish answers to the Commission’s targeted survey regarding the pro-
posal.
In general, Denmark encourages the Commission to streamline definitions
to ensure a clear and user-friendly framework. I.e. auctions and competitive
bidding processes which are mentioned several times in the draft CISAF.
However, only “competitive bidding process” is defined
in section 2 of the
draft.
Section 4: Aid to accelerate the roll out of renewable energy
We appreciate the possibility to have more flexibility to choose how the
implementation of the scheme should be carried out, while at the same time
building on the experiences from use of the TCTF. It is in the interest of
the EU to speed up approval of such State aid measures, while maintaining
safeguards to ensure that the aid incentivising green transition is propor-
tionate and not overcompensating the beneficiary.
We welcome that the provisions on State aid to accelerate the roll out of
renewable energy is more technology neutral and now includes aid possi-
bilities for
Renewable Fuels of Non Biological Origin
(RFNBO).
In general, we support the points as described in section 4.1. The Danish
authorities, thus, would like to emphasise the need to clarify that the main
framework for the compatibility assessment on state aid for green fuels will
be CISAF, in order to avoid overlapping rules in e.g. the coming Aviation
Guidelines or RefuelAviation -directive on the promotion of the use of en-
ergy from renewable sources (III). From a Danish point of view, overlap-
ping State aid frameworks should be avoided to make the rules simpler.
Also, we find a there is a need to address cumulation issues.
Denmark finds that
a clarification on the terms ”renewable
energy”
and
“energy”
is needed. In conjunction with this point, we would like the
framework to state explicitly whether state aid for e-SAF is applicable un-
der section 4 and that the section applies to different technologies without
excluding schemes containing more than one technology.
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As for the acceleration deadline described in point 37, the EU has a com-
mon interest in implementing the projects as fast as possible, while also
having a realistic timeframe. However, we find that in some cases 36
months can be too short a timeframe for completing a supported project
and having it in operation. Especially if the market is new or emerging.
Denmark suggests supplementing the deadline so that Member States in
specific cases can be granted an extended deadline upon a justified need.
Non-Fossil flexibility
In general, Denmark supports the points as described under subsection 4.2.
on non-fossil flexibility support schemes.
In our view, the condition that non-fossil flexibility technologies must be
able to provide services for handling capacity constraints seems difficult to
comply with by Member States, as it is not a requirement for system oper-
ators under EU-law to establish local flexibility markets. The same applies
to market-based redispatching, where there may be exemptions under the
Electricity Market Regulation. Denmark suggests that in case market-dis-
patching applies and/or markets for the provision of congestion, manage-
ment services are in place.
In Denmark’s
view,
it could be more attractive to participate in a capacity
market rather than in an NFFSS. Since only non-fossil flexibility may par-
ticipate in the NFFSS, demand flexibility and storage could experience a
disadvantage compared to fossil controllable capacity, which has access to
longer contracts in a capacity market. The NFFSS can help promote non-
fossil flexibility, however, they could create an unfavorable competitive
situation compared to incumbent fossil flexibility, which potentially has
access to a capacity market for twice as long time. Therefore, we suggest
the Commission to consider an alignment of the approval periods.
Capacity mechanisms
Denmark welcomes the proposal for standardized capacity mechanisms,
which can promote uniform development across the EU.
In Denmark, we have experienced a movement in the market from tradi-
tional bank-financed investments to financing larger investments through
leasing. In order to ensure a proper interplay with the Regulation on the
Internal Market for Electricity we find that guidance in the CISAF on how
to handle leasing in regard to state aid projects is needed.
Denmark acknowledge and appreciate the overall framework of Annex 1.
However, we doubt whether ERAA de-ration is the appropriate system for
capacity-market design.
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Section 5: Industrial decarbonisation
Denmark believes that the decarbonisation of the European industries is an
important step to decrease European dependency of fossil fuels from third
countries. Therefore, we support the possibility to grant State aid to support
industrial decarbonisation. Moreover, we support the Commission’s efforts
to give Member States “off the shelf” possibilities to design measures that
can be approved by the Commission as compatible State aid.
We appreciate the possibility to have more flexibility as regards decarbon-
isation. However, we would appreciate more guidance on the difference
between the subsections on funding gap and individual notification and
competitive bidding under section 5 and the same issues noted in different
points and subsections under section 4.
Denmark would also welcome clarification and guidance on how to calcu-
late fund gap and counterfactual scenarios in order to streamline these con-
cepts as much as possible.
We support the simplified rules for approval of State aid for projects that
support specific Innovation Fund projects and has been awarded a sover-
eignty seal.
Section 6: Aid to ensure sufficient manufacturing capacity in clean
technologies
In the current geopolitical situation, Denmark supports the continuation of
the possibility to grant State aid to clean manufacturing in strategic sectors,
also outside assisted areas with an aim to strengthen European resilience,
while subject to strict safeguards to ensure proportionality and that the aid
does not distort competition on the internal market.
As the Commission has also set out in its
Clean Industrial Deal Communi-
cation,
CISAF is building on TCTF. Denmark supports the continuation of
these aid possibilities in the same sectors as included in the TCTF. We do
not have evidence of a need to extend the aid possibility to all sectors men-
tioned in the annex of NZIA and would only support this if such an exten-
sion is backed by evidence for a specific need.
We support the Commission’s intention to shift
to a principle of assessing
aid per project and not per undertaking. This will further simplify the rules
and support the realisation of relevant projects. We agree with the Com-
mission’s assessment that the aid limit should be reduced correspondingly
and support this proposal.
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Furthermore, Denmark supports the safe harbour aid amount for aid instru-
ments as loans and guarantees. We find that it is a step in the right direction
that the framework further incentivizes this type of aid by removing refer-
ences to nominal loan amounts, since it is less distortive than direct grants.
As for the ad hoc aid for manufacturing, we do not oppose the extension of
the provision. We support, that the provision, in line with TCTF, requires
the beneficiary to demonstrate that in absence of the aid the project would
have to be carried out in a third country jurisdiction with aid. Denmark does
not oppose the proposal to introduce further flexibility to grant this type of
aid outside assisted areas as long as this is subject to strict safeguards and
lower aid intensities in order for the beneficiary to take the main risk for
the project.
For Denmark, it is very important that the rules in general ensure that State
aid is not used to facilitate relocation of jobs or production activities within
the EEA. We therefore support clear provisions on this aspect.
Section 7: Aid to reduce risks of private investments
Generally, finding ways to encourage, mobilise and attract more private-
sector investment in strategic European priorities is essential for promoting
growth and job creation across the EU.
Denmark
welcomes the Commission’s new provision, which can contrib-
ute to crowding in private investments.