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State aid rules for research, development and innovation

Summary
Evaluation
Commission Proposal
Legal Act
Implementation

Overall state of play

Evaluation: finalised;
(An evaluation of the Framework for state aid for research, development and innovation was launched on 8 January 2019¹ in the context of a fitness check of State aid rules, concluded on 30 October 2020 (SWD (2020) 257).)
The framework was adopted on 19 October 2022: Communication from the Commission Framework for State aid for research and development and innovation (OJ C 414, 28.10.2022, p. 1–38)

State of play, main conclusions, outlook

In line with the findings of the evaluation performed in the context of the fitness check of the State aid, the framework for state aid for research, development and innovation was updated in a targeted manner. The revised State aid framework will make it easier for Member States to support research, development and innovation, including by small and medium-sized companies, while ensuring that possible competition distortions are kept to the minimum.

Estimated savings and benefits

The initiative is expected to simplify the application of the rules and improve their effectiveness and efficiency, making it easier for Member States in implementing these measures into transformative digital, health and carbon neutral technologies thus facilitating the green and digital transition. In this regard, under the revision, a simplification is introduced to calculate eligible costs for R&D projects by allowing for the application of a simplified methodology for the calculation of indirect costs. At present, the rules of the GBER allow Member States to use simplified cost options only when the project or activity is at least partially financed through a Union fund (e.g. Horizon – ESIF). The results of the fitness check revealed the need for a wider application of simplified cost options for calculating the indirect eligible costs. As actual indirect eligible costs are often difficult to verify and demonstrate, the use of a simplified cost option for indirect costs simplifies significantly the granting of aid for R&D projects by managing authorities. In addition, the fitness check points to the lack of rationale for excluding R&D projects funded through purely national resources (including RRF funds) from this possibility.

¹ https://ec.europa.eu/competition-policy/public-consultations/2021-rdi_en

State of Play

An evaluation of the framework for state aid for research, development and innovation was launched on 8 January 2019 in the context of the fitness check of State aid rules.
The fitness check of State aid rules concluded on 30 October 2020 (SWD (2020) 257)
(Linked to the REFIT scoreboard fiche: Fitness check of 2012 State aid modernisation package, railways guidelines and short-term export credit insurance)

Scope

The fitness check of State aid rules concluded on 30 October 2020 covered a number of State aid instruments, including the framework for state aid for research, development and innovation.

Evaluation findings

The fitness Check confirmed that in general the rules implemented following the State aid modernisation in 2013, have helped to increase collaborations between undertakings (SMEs and large enterprises) and between undertakings and research organisations. The State aid Scoreboard data show that the interventions targeting innovation clusters were overall effective, leading to a steady and continued increase in public State aid expenditure, from EUR 53.2 million in 2015 to EUR 192 million in 2018. Further, the RDI external study confirms that State aid was essential to carry out the evaluated RDI activities and helped companies and/or research organisations to receive the necessary funding.

The fitness check showed that the RDI rules achieved their objectives while both through the internal analysis and the interviews carried out under the RDI external study, identified room for further clarification on the interpretation of certain provisions (in particular concerning knowledge transfer activities, research infrastructures, innovation clusters, interplay of those measures with innovation aid provisions, on process and organisational innovation). More specifically, the rules on how to declare eligible costs were seen as ‘fit for purpose’ by more than 70% of the interviewees. Some criticism pointed to the need to simplify through the use of simplified cost options such as flat rates and lump sums.

State of Play

The framework was adopted on 19 October 2022: Communication from the Commission Framework for State aid for research and development and innovation (OJ C 414, 28.10.2022, p. 1–38)

The revised State aid framework will make it easier for Member States to support research, development and innovation, including by small and medium-sized companies, while ensuring that possible competition distortions are kept to the minimum. Among other things, the revised RDI Framework includes a number of targeted adjustments to simplify and reflect the experience gained from the application of the 2014 RDI framework. For example, the new rules introduce a simplified mechanism to determine the indirect costs of research and development projects that are eligible for support under State aid rules.