EU Commission approves €4bn French scheme for manufacturing decarbonisation

The European Commission has approved a €4bn French scheme under the Temporary Crisis and Transition Framework to support decarbonisation measures in the manufacturing sector, including investments in electrification of industrial processes and investments in energy efficiency, to foster the transition to a net-zero economy. 

The aid will take the form of direct grants amounting to up to 30% of the project's investment costs of companies active in the manufacturing sector in France. Eligible electrification projects must lead to a reduction of greenhouse gas (GHG) emissions from industrial processes of at least 40% compared to today, while energy efficiency projects must lead to a reduction in the energy consumed in industrial processes of at least 20% compared to today. For investments relating to activities covered by the EU Emission Trading System (ETS), the emissions reduction must go below the relevant ETS benchmarks in force at the time of granting the aid. The aid per beneficiary will not exceed 10% of the total budget (i.e. €400m) and it should be granted until no later than 31 December 2025. Furthermore, the aid will be subject to conditions to ensure actual emissions savings. The investments must be completed within 36 months after the aid has been granted and the aid must not enable the beneficiaries to increase their production capacity beyond 2% compared to today. 

In March 2023, the Commission adopted a new Temporary Crisis and Transition Framework to foster support measures in sectors which are key for the transition to a net-zero economy, in line with the Green Deal Industrial Plan. The Framework amends and prolongs in part the Temporary Crisis Framework, adopted in March 2022, to enable Member States to use the flexibility foreseen under State aid rules to support the economy in the context of Russia's war against Ukraine.