Integrating resource efficiency and EU State aid

This study, for the European Commission, analyses the issues that need to be addressed in the revision of the EU State aid framework to ensure that they do not hinder environmental, resource efficiency and sustainable development goals.  In some cases, State aid can be considered an environmentally harmful subsidy (EHS).  

The study: 

  • Analyses the extent to which the Environmental Aid Guidelines (EAG) need to be changed to take into account recent European environmental policy developments.

  • Analyses existing and potential resource efficiency considerations in a) the Regional Aid Guidelines; b) the Research, Development and Innovation (R&D&I) Guidelines and c) the Agriculture and Forestry Guidelines.

  • Assesses cases and schemes using these guidelines to identify whether resource efficiency considerations are taken into account. The study also considers the social, environmental and economic impacts of these cases and schemes. 

  • Develops recommendations for the review of the EAG and a number of horizontal guidelines. 

One of the conclusions of the analysis is that the way in which multiple objectives and impacts are balanced, when deciding to approve state aid is unclear. Also, EU member states are not required to provide information on certain types of (estimated) impacts. To guarantee that multiple objectives and impacts are sufficiently balanced, it is recommended that the State aid framework prescribes that applicants identify social, economic and environmental objectives and impacts and describe how these are taken into account in the procedure of balancing multiple (conflicting) objectives. Objectives and impacts should be quantified as much as possible, for example by making use of the method of external cost calculation laid down in “the Handbook on estimation of external costs in the transport Sector”. 

The study was executed together with Ricardo-AEA and commissioned by the European Commission (DG Environment). The results of the study are used by the European Commission as an input for evaluating and improving the EU State aid framework.