European Government Incentives & State Aid Update - Fall 2022
Hickey’s European Government Incentives & State Aid Update - Fall 2022
The following is an update on government incentives and state aid across the dynamic European region for the fall of 2022. Information and intelligence have been assembled by Hickey’s European Location Strategy and Incentives team.
2022 was to be the year for recovery following economic downturn caused by the pandemic, however events in the Ukraine have refocused efforts to improve energy efficiency and improve supply chains. Economies across Europe are experiencing turbulence in their markets and the threat of recession looms large. Record energy prices have pushed up inflation and interest rates and governments are actively relocating funds to help mitigate these issues.
Hickey can guide you through the support that could be available to your business if you’re:
Planning to make changes to your workforce – training, growth, and in some cases, retention of the workforce can all attract funding under the right circumstances
Investing in reducing your environmental impact – reducing energy use and carbon emissions are high on the priority for many governments
Involved in innovation – funding in this area can go beyond tax credits.
The combined EU budget 2023 and NextGenerationEU will provide approximately €300 billion in funding to support a stronger and more resilient Europe. The European Commission plans to continue prioritising green and digital investments while addressing the pressing needs arising from the pandemic and the invasion on the Ukraine. The 2023 budget aims to encourage significant investments to boost Europe’s ongoing economic recovery, safeguard sustainability and create jobs.
The Proposed Areas of Funding Include:
€103.5 Billion in Grants from NextGenerationEU under the Recovery and Resilience Facility (RRF) to support economic recovery and growth following the coronavirus pandemic and to address the challenges posed by the war in Ukraine.
€46.1 Billion for Regional Development and cohesion to support economic, social and territorial cohesion, as well as infrastructure supporting the green transition and Union priority projects.
€13.6 Billion for Research and Innovation, of which €12.3 billion for Horizon Europe, the Union’s flagship research programme. It will receive an extra €1.8 billion in grants from NextGenerationEU
€4.8 Billion for European Strategic Investments, of which €341 million for InvestEU for key priorities (research and innovation, twin green and digital transition, the health sector, and strategic technologies). InvestEU will also receive an extra €2.5 billion in grants from NextGenerationEU.
€4.8 Billion for People, Social Cohesion, and Values, of which €3.5 billion will be allocated to Erasmus+ to create education and mobility opportunities for people.
€2.3 Billion for Environment and Climate Action, of which €728 million for the LIFE programme to support climate change mitigation and adaptation.
New UK incentive Investments regulations from January 2023
Initial area of the economy to receive additional support are likely to be Digital Technology, Life Sciences, Green Industries, Financial Services, and Advanced Manufacturing have been identified as key industries for growth by the UK government and reforms to retained EU laws governing these sectors are underway.
The latest budget aims to refocus the investment zones programme to catalyse a limited number of high potential growth clusters. Research and innovation are to be the basis for knowledge-intensive growth clusters and the government is expected to announce the first of these clusters in the next few months. This will be in addition to the £2.6 billion allocated to Innovate UK programmes to support business-led innovation across all sectors.
New incentives guidelines for the UK will come into effect in January 2023 with the aim to
Deliver subsidies tailored to local needs
Support government priorities such as driving economic growth
Reach net zero
We expect additional measures to be announced once the current political and economic conditions have stabilised.
The State Aid Temporary Crisis Framework has:
On 28 October, the European Commission extended and amended the State Aid Temporary Crisis Framework to enable Member States to continue to support companies impacted by Russia’s invasion of the Ukraine
Been extended from 31 December 2022 to 31 December 2023
Increased the ceilings set out for limited amounts of aid to €2 million, which allows Member States to provide flexible support to undertakings (other than those in the agricultural and fishery sector) affected by the Russian aggression against Ukraine and/or by the sanctions imposed or by the retaliatory counter measures taken in response
Introduced additional measures to support electricity demand reduction through accelerating the rollout of renewable energy, storage, and renewable heat relevant for REPowerEU
Increased the flexibility and support offered to companies affected by rising energy costs.
This report provides updates and information on these schemes to keep your business aware of changes that can affect you directly.
For more information on these critical updates on European government incentives and state aid and/or to determine if your project is eligible, please connect with a Hickey EMEA Location Strategy & Incentives expert today: