By Foo Yun Chee

BRUSSELS (Reuters) -Businesses will find it easier to get state aid for projects aimed at cutting their carbon emissions and to switch to green projects while heavy industries will benefit from temporary power price relief under looser rules announced by the European Commission on Wednesday.

The new state aid rules, valid until December 2030, are part of the Commission's goal to revitalise Europe's industries with its Clean Industrial Deal to help them better compete with U.S. and Chinese rivals and also encourage them to stay put in Europe.

The new rules will make it easier for pension funds, insurers and other private investors to co-invest in green projects.

However, industry association Eurometaux said more needs to be done to help European businesses and the new legislation did little to simplify the current regulatory landscape.

Under the new rules, state support can be direct grants, tax advantages including tax credits and accelerated depreciation, subsidised interest rates on new loans or guarantees on new loans.

The amount of state aid can be up to 200 million euros ($232 million) or based on the funding gap or as a result of a competitive bidding process.

Beneficiaries are projects to roll out renewable energy and low carbon fuels, investment aid schemes, direct price support schemes and capacity mechanisms.

Heavy industries such as chemicals or cement makers applying for temporary electricity price relief will have to invest in decarbonisation.

"The new framework simplifies and speeds up support for decarbonisation, but it goes further: it recognises the state as a strategic investor in our future," Commission Vice-President Teresa Ribera said in a statement.

"It's a tool to drive climate ambition, strengthen Europe's resilience, and ensure our industry remains globally competitive," she said.

Eurometaux Director General James Watson said, "the Clean Industrial Deal State Aid Framework fails to live up to the Commission’s political promises of 'prosperity and competitiveness'."

"While we welcome the investment support for critical raw material production, it is crucial to ensure that all enabling conditions are in place to support a strong and sustainable metals sector in Europe," he added.

($1 = 0.8624 euros)

(Reporting by Foo Yun Chee, additional reporting by Julia Payne; Editing by Benoit Van Overstraeten, Alexandra Hudson)