State aid: Commission authorises temporary Italian interest rate subsidies for green products

The European Commission has authorised under EC Treaty state aid rules an Italian scheme offering interest rate subsidies for the production of environmentally friendly (green) products in the car parts sector. The Commission concluded that the scheme will facilitate investments in products featuring an early adaptation to EU standards for the improvement of environmental protection.

The Aid meets the conditions of the Commission’s temporary state aid framework that gives Member States additional possibilities for providing businesses with improved access to financing during the economic and financial crisis (see IP/08/1993 ), as amended on 25 February 2009. The measure is therefore compatible with Article 87(3)(b) of the EC Treaty, which permits aid intended to remedy a serious disturbance in the economy of a Member State.

Competition Commissioner Neelie Kroes said: "The Italian measure will help companies to shift their business model in accordance with EU environmental objectives, without unduly distorting competition."

On 6 October 2009, Italy notified a temporary scheme, offering subsidised loans for green products, to the Commission. Under the scheme, such loans can only be granted for investments relating to products that will meet or surpass future EU environmental standards. The measure will focus on the car component industry and more precisely on financing investments related to an early adaptation to or over-achieving of the so-called 'Euro 6' standard which regulates emissions for light passenger and commercial vehicles.

Subsidised loans may be granted until 31 December 2010 and the reduced rate will apply for a maximum term of two years. The reduction in the interest rate will not exceed 50% for small and medium-sized enterprises (SMEs) and 25% for large businesses, as compared to the reference rate, and must take into account the enterprise's risk profile when the loan is granted. The overall budget is €300 million. The aid scheme applies only to businesses that were not in difficulties on 1 July 2008.

This scheme is the fifth measure authorised for Italy under the new temporary framework for state aid, after the risk-capital scheme (see IP/09/825 ), the guarantee scheme (see IP/09/852 ), the scheme for aid of up to €500 000 (see IP/09/852 ) and the reduced interest rate scheme (see IP/09/857 ). Italy is the fifth country to avail itself of the provisions on aid for the production of green products under the Temporary Framework, the others being France (see IP/09/205 ), Germany (see IP/09/1223 ), Spain ( IP/09/499 ) and UK (see IP/09/333 ).

The decision will be made available under case number N 542/2009 in the State Aid Register on the DG Competition website once all the confidentiality issues have been resolved.

[26 october 2009]

Subjects (TAGS): Environmental protection -