The European Commission has introduced a new regulation called the Clean Industrial Deal State Aid Framework (CISAF) to help member states accelerate their transition to clean energy, industrial decarbonization and clean technology with the scope of the Clean Industrial Deal.
Accordingly, CISAF defines how member states can provide public support for clean industry investments under EU state aid rules. It enables the rapid implementation of national aid programs introduced by member states. The framework will apply until December 31, 2030, and will also offer long-term stability for governments and businesses.
There are five key focus areas of CISAF. One of them is offering simplified procedures to fast-track support for projects such as wind and solar power, and green/blue hydrogen with the aim of helping hard-to-abate industries in achieving the decarbonization goals of the Clean Industrial Deal.
Moreover, member states will now offer electricity cost support for companies that operate in industries exposed to global competition and rely heavily on electricity, allowing the reduction of the electricity costs of energy-intensive users that face higher costs than competitors in regions with less ambitious climate policies. In exchange, recipient companies will be required to invest in decarbonization efforts.
Furthermore, CISAF will offer flexible funding options for a broad range of decarbonization or energy efficiency technologies, including electrification, hydrogen, biomass, and carbon capture, utilization and storage (CCUS).
The framework will also provide public support for the investments in the production of clean technologies covered by the Net-Zero Industry Act. Aid will be provided on an individual basis when needed to avoid such investments from moving outside the EU. It will provide support for the investments in the production and processing of critical raw materials necessary for clean technologies. Additionally, the framework will encourage demand for clean technologies by offering tax incentives, such as accelerated tax deductions, to companies that invest in clean technologies.
Ultimately, CISAF will allow member states to reduce the financial risks of private investments by offering equity, loans, or guarantees, specifically for initiatives in energy infrastructure, the circular economy, and other clean industry areas.
