Draft shows EU to relax state aid rules for green projects

According to a draft document of the European Commission, businesses could be able to get state aid or other financial incentives if they are working on projects that reduce their carbon emissions.

The guidelines aim to encourage private investors, such as pension funds, insurance companies, and insurers, to invest in green projects.

The Clean Industrial Deal, as the Commission calls it, will be presented by the Commission on Friday 26th February.

Public support is needed to accelerate decarbonisation. This Communication gives member states a longer planning period and provides businesses with predictability and security in their investments," said the document.

According to the draft (which could change before publication), EU governments will be allowed to offer tax breaks by using measures like accelerated depreciation, which allows businesses to write off more of the cost of an item in its early years.

Grant aid could be used for capacity mechanisms that pay power plants in order to guarantee supply. This would help accelerate the deployment of renewable energy throughout the 27-country EU.

The document outlines the extent, duration and magnitude of state funding for green projects as well as safeguards against misuse. (Written by Foo Yunchee; edited by Barbara Lewis).

(source: Reuters)