EU seeking feedback on looser rules for state aid to encourage clean tech projects

The European Union's state aid regulators want to hear from its member countries about new rules that will allow governments to provide grants and other financial incentives to businesses and clean technology projects to reduce carbon footprint. These rules are intended to help EU businesses compete better with their U.S. or Chinese competitors. They will be implemented in June and valid until 2030. These rules are part of an energy-hungry industry package announced last month.

These guidelines will make it easier for private investors, pension funds and insurers to invest in green projects. The draft communication that announced the new rules stated: "Investments are required to accelerate the rollout of renewable energies, to deploy industrial carbonisation, and ensure sufficient manufacturing capability of clean technology." Under the new rules, state aid is allowed in the form of direct grants, tax benefits, such as tax credits, accelerated depreciation and subsided interest rates or loan guarantees. Beneficiaries include renewable energy schemes and energy storage, measures to facilitate industrial decarbonisation, and projects for manufacturing batteries, solar panels and wind turbines.

These rules also allow EU governments matching aid to large projects that could be diverted out of Europe due to non-EU incentives and subsidies.

The European Commission will then refine the guidelines and adopt them after receiving feedback from third parties until April 25, 2019. (Reporting and editing by Paul Simao; Foo Yunchee is the reporter)

(source: Reuters)