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EU set to loosen state aid rules to spur green projects, draft shows
Published by Global Banking & Finance Review®
Posted on February 18, 2025
2 min readLast updated: January 26, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on February 18, 2025
2 min readLast updated: January 26, 2026
The EU plans to ease state aid rules to boost green projects, enhancing investment predictability and encouraging private co-investment.
By Kate Abnett
BRUSSELS (Reuters) - Businesses could find it easier to obtain state aid and other financial incentives for projects aimed at cutting their carbon emissions, under measures laid out in a draft European Commission document seen by Reuters.
As well as trying to spur government aid, the guidelines seek to make it easier for pension funds, insurers and other private investors to co-invest in green projects.
They form part of what the Commission terms the Clean Industrial Deal that it will present on February 26.
"Public support will be necessary to advance decarbonisation efforts. This Communication provides member states with a longer planning horizon and businesses with investment predictability and security," the document said.
According to the draft, which could change before official publication, EU governments would be allowed to provide tax breaks through measures such as accelerated depreciation that allows a business to write off a greater part of the cost of an asset in the early years of its life.
Other measures could include grant aid for capacity mechanisms, which pay power plants to ensure supply, with the aim of fast tracking the rollout of renewable energy across the 27-country bloc.
The document details the scope, magnitude and duration of the state aid allowed for green projects, as well as safeguards to prevent misuse of the funding.
(Writing by Foo Yun Chee; editing by Barbara Lewis)
The draft guidelines aim to make it easier for businesses to obtain state aid and financial incentives for projects focused on reducing carbon emissions.
The EU plans to allow governments to provide tax breaks and grant aid to support green projects, which includes measures like accelerated depreciation.
The guidelines seek to facilitate co-investment opportunities for pension funds, insurers, and other private investors in green projects.
The Clean Industrial Deal is an initiative by the EU aimed at advancing decarbonisation efforts and will be presented on February 26.
The document outlines the scope and duration of state aid allowed for green projects, along with safeguards to prevent misuse of the funding.
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