on the practical impact of RDI State aid rulesAbstract (EN/FR) EN-This study aimed to assess the...

Final Report

Prepared by

Study

RDI State aid ruleson the practical impact of

Competition

EUROPEAN COMMISSION

Directorate-General for Competition E-mail: [email protected]

European Commission B-1049 Brussels

[Catalogue num

ber]

Study on the practical impact of

RDI State aid rules Fact-finding inventory in selected Member States

Final report

LEGAL NOTICE

The information and views set out in this report are those of the author(s) and do not necessarily reflect the official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this study. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for the use which may be made of the information contained therein.

More information on the European Union is available on the Internet (http://www.europa.eu).

Luxembourg: Publications Office of the European Union, 2019

Catalogue number: KD-01-19-584-EN-N ISBN 978-92-76-08864-6 doi: 10.2763/646396

© European Union, 2019 Reproduction is authorised provided the source is acknowledged. The reproduction of the artistic material contained therein is prohibited.

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Authors:

Ecorys (NL): Olga Batura Anke Bodewes Robert Haffner Lars Meindert Anne Winkel

Country teams: Veronika Brantova (Czechia, Ecorys) Luc Fischer (Belgium, Ecorys) Elizabeth Gil (ES, University of Allicante) Aneta Kovacheva (Bulgaria, Ecorys) Agnes Kügler (Austria, Wifo) Evelin Pärn-Lee (Estonia, independent) Dominika Safin (Poland, Ecorys)

In cooperation with: Caroline Buts (VUB - University of Brussels)

Study on the practical impact of RDI State aid rules

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Table of Contents

ABSTRACT (EN/FR) ....................................................................................................... 3 EXECUTIVE SUMMARY (EN) ............................................................................................ 5 RESUME OPERATIONNEL (FR) ......................................................................................... 9 1 INTRODUCTION TO THIS STUDY ............................................................................ 14

Context and objective of the study ................................................................ 14 The collection of factual evidence: what were the results? ................................ 17

1.2.1 Description research approach for collection factual evidence .... 18 1.2.2 Results of the collection of factual evidence ............................. 21

2 STAKEHOLDER OPINIONS: THE APPLICATION OF THE RDI STATE AID RULES IN PRACTICE (RESEARCH QUESTION 1) ...................................................................... 23

Introduction and main findings ...................................................................... 23 Stakeholder opinions: do the RDI State aid rules (i.e. individual provisions)

present an obstacle? .................................................................................... 24 Stakeholder opinions: are the RDI State aid rules (i.e. individual provisions)

unduly burdensome? ................................................................................... 26 3 ACTUAL MODIFICATIONS IN RDI STATE AID APPLICATIONS (RESEARCH QUESTION

2) ....................................................................................................................... 31 Introduction and main findings ...................................................................... 31 Share of applicants who were requested to make modifications in their State

aid applications ........................................................................................... 32 Summary overview of main processes used for the assessment of RDI State

aid applications in the selected Member States ............................................... 33 Timing of content-related modifications irrespective of reason for modification

................................................................................................................. 34 Type and extent of requested modifications irrespective of reason for

modification ................................................................................................ 35 Effects of the requested modifications irrespective of the reason for the

modification ................................................................................................ 36 Case studies: individual examples of the timing, extent and effect of

modifications irrespective of the reason for the modifications ............................ 37 4 ANALYSIS OF THE UNDERLYING REASONS FOR CHANGES IN APPLICATIONS

(RESEARCH QUESTIONS 3 AND 4) .......................................................................... 41 Introduction and main findings ...................................................................... 41 Reasons for requested modifications .............................................................. 41 Case studies: underlying reasons for modifications of State aid applications ....... 43 Identification of specific provisions of the RDI State aid rules linked to

modifications .............................................................................................. 46 5 IDENTIFICATION OF EVIDENT PATTERNS (RESEARCH QUESTION 5 AND 6) ................. 49 ANNEX A: FOLLOWED METHODOLOGY FOR INFORMATION/DATA GATHERING ..................... 51 ANNEX B: STATE AID APPLICANTS – OVERVIEW OF INFORMATION RECEIVED .................... 61 ANNEX C: RESULTS OF THE WEB-SURVEY (ALL SELECTED COUNTRIES) ............................. 69


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Abstract (EN/FR)

EN- This study aimed to assess the extent to which, if any, the 2014 State aid rules have a detrimental impact on RDI activities in a manner or to a degree which is disproportionate to the objective of these rules. To this end, factual evidence was collected from State aid applicants and various national granting authorities on applications for RDI State aid. The study found only around a quarter of the respondents declared that modifications to their original State aid applications were made and only around half of these modifications are considered to have had a detrimental effect on the planned RDI projects, i.e. delayed their commencement, reduced their scope or increased their cost. This concerns modifications requested by the granting authorities for any reason, whether due to the rules on structural funds, RDI State aid rules, to adapt to funding priorities of the national scheme/policy, procedural requirements of the granting authority, requirements by auditors or other. In some cases, a positive effect on the planned projects was reported by applicants. A definite causal link between the RDI State aid rules (especially their specific provisions) and modifications of detrimental nature could not be established due to an insufficient amount of factual evidence. The study was also unable to establish unequivocally whether stakeholders perceive individual provisions of State aid rules for RDI activities as an obstacle or as unduly burdensome. This is because applicants are not always aware of the specific legal rules which govern their State aid applications. Only anecdotal evidence suggests that some of the relevant provisions may be perceived as challenging to understand and comply with.

FR - Cette étude vise à évaluer dans quelle mesure les règles de 2014 en matière d'aides d'État ont un impact préjudiciable sur les activités de RDI d'une manière ou dans une mesure disproportionnée par rapport à l'objectif de ces règles. À cette fin, des preuves factuelles ont été collectées auprès de demandeurs d’aide d’État et de diverses autorités nationales d’octroi portant sur des demandes d’aide d’État à la RDI. Selon l’étude, environ un quart seulement des entités interrogées ont déclaré que leurs demandes d’aide d’État avaient été modifiées et que seulement environ la moitié de ces modifications avaient eu un effet préjudiciable sur les projets de RDI prévus, c’est-à-dire que le commencement des projets avaient été retardé, leur portée réduite ou leur coût augmenté. Cela concerne les modifications demandées par les autorités d’octroi pour quelque raison que ce soit: soit en raison des règles sur les fonds structurels, des règles relatives aux aides d'État à la RDI, soit afin de s'adapter aux priorités de financement du régime / de la politique nationale, ou bien en raison des exigences de procédure de l'autorité d’octroi, ou des exigences imposées par les auditeurs ou autres. Dans certains cas, les demandeurs ont signalé un effet positif sur les projets prévus. Un lien de causalité bien défini entre les règles relatives aux aides d'État à la RDI (en particulier leurs dispositions spécifiques) et les modifications de nature préjudiciable n'a pu être établi en raison d'un nombre insuffisant de preuves factuelles. L’étude n’a pas non plus permis d'affirmer sans équivoque si les parties prenantes perçoivent les dispositions individuelles des règles en matière d’aides d’État pour les activités de RDI comme un obstacle ou une charge excessive. En effet, les demandeurs ne sont pas toujours au courant des règles juridiques spécifiques régissant leurs demandes d'aides d'État. Seules des preuves anecdotiques suggèrent que certaines des dispositions pertinentes peuvent être perçues comme difficiles à comprendre et à respecter.


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Executive summary (EN)

I. Introduction and context of the study

Research, development and innovation (RDI) activities have been identified by the European Union (EU) as a key driver for growth and job creation. Public funding of RDI activities, at both national and EU level, plays a crucial role in unlocking the full research potential. National public funding is subject to the EU State aid rules, more specifically to the 2014 General Block Exemption Regulation (GBER)1 and the 2014 Framework for State aid for research and development and innovation (RDI Framework)2.

There appears to be a perception for some stakeholders that RDI State aid rules may have a negative impact on RDI activities, for example, because they are difficult to comply with, create additional costs and cause delays, and it is not always clear whether this perception relates to the new set of simplified rules adopted in 2014. As criticisms tend to remain at a general level and are often based on the anecdotal experiences of some stakeholders, the European Commission commissioned this fact-finding study which, based on collected factual evidence, should result in an improved understanding of what actually happens at the level of individual RDI projects and RDI State aid applications.

This study was launched in May 2018 with the objective to collect and assess factual evidence3 on the extent to which, if any, the 2014 RDI State aid rules have a detrimental effect on RDI activities in a manner or to a degree which is disproportionate to the objective of these rules. In order to reach the overall objective of this study, six research questions were posed at the start of the study. These are presented per section in this executive summary.

II. Approach towards the collection of factual evidence

The research team approached granting authorities in seven selected4 EU Member States with the aim to (i) receive support in the identification and contacting of State aid applicants, and (ii) request specific factual evidence. With the support of the granting authorities, public authorities and the European Association of Research and Technology Organisations (EARTO), State aid applicants in nine countries5 were approached via a web-survey and asked to share their experiences and views. In total, 1,183 respondents started to complete the survey, and 911 respondents completed it; the rest gave partial responses. Based on the answers to the web-survey, a group of respondents (78) was identified as having had to make relevant changes to their

1 Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty, OJ L 187 of 26.6.2014.

2 Communication from the Commission — Framework for State aid for research and development and innovation, OJ C 198 of 27.6.2014.

3 The factual evidence to collect includes, for example, formal and informal exchanges between (potential) applicants and national granting authorities, which contain feedback, suggestions for changes or specific instructions for modifications of State aid applications.

4 In order to scope and tailor the study, seven EU Member States were selected for the data collection. This selection was based on four main criteria: (1) selection of at least three Member States with the highest annual spending on RDI State aid in 2014 or 2015, (2) a balance between small and large Member States, (3) adequate coverage of the European Union in terms of geography and (4) a balance between Member States that joined the EU before 2004 (EU15) and after 2004 (EU13) and demonstrated (or not) compliance with ex ante conditionality on State aid. The seven selected countries are Austria, Belgium, Bulgaria, Czechia, Estonia, Poland and Spain. More details are presented in section 1.2.1 of the main report and Annex A.

5 In addition to the seven selected Member States, public authorities / granting authorities in France and Norway provided their support in distributing the web-survey among RDI State aid applicants in their countries.


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applications and as willing to be contacted again, and was approached with requests to provide specific factual evidence.

The web-survey resulted in a dataset that contributes to the overall objective of the study. However, the efforts to collect (anonymised) specific factual evidence resulted in only a few items of non-public factual evidence. With a few exceptions, both from the side of the State aid applicants and granting authorities, the willingness and/or ability to share the necessary information was limited. Given the results of the collection of factual evidence, it was not possible to answer all research questions in the way in which it was originally intended. The size of the sample and the received responses did not allow to make solid statistical observations. Particularly for research questions 4, 5 and 6 the available factual evidence was insufficient to derive solid and reliable insights and conclusions.

III. Stakeholder opinions: the application of the RDI State aid rules in practice

Research question 1

With regard to the overall purpose6 of the RDI state aid rules: In the opinion of stakeholders, do individual provisions of the current State aid rules on

RDI present an obstacle to the attainment of this purpose? If so, which ones and why? In the opinion of stakeholders, are individual provisions of the current State aid rules on

RDI unduly burdensome, i.e. disproportionate in relation to the attainment of this purpose? If so, which ones and why?

The first part of the research question asks whether, in the opinion of stakeholders, individual provisions of the current State aid rules on RDI present an obstacle. The web-survey demonstrated that individual respondents are often not aware of the specific legal rules that govern their applications. As a result, the research team was unable to identify specific stakeholder opinions as to whether individual provisions of the current State aid rules for RDI activities form an obstacle. Various granting authorities contributed to the study by bringing forward their experiences and/or views on the functioning of the RDI State aid rules, as well as other (related7) rules, in the day-to-day practice. These inputs vary in form and level of detail from general statements with examples to some specific documented examples. These opinions refer, for instance, to the definition of undertakings in difficulty, definition of economic/non-economic activities and cumulation of aid. The issues raised do not relate directly to the RDI State aid rules specifically. See section 2.2 of the main report for more details.

The second part of the research questions asks whether, in the opinion of stakeholders, individual provisions of the current State aid rules for RDI activities are unduly burdensome. As indicated, the input from individual respondents to the web-survey has clear limitations for the identification of individual provisions which may be perceived as unduly burdensome. As a result of this, the web-survey does not provide sufficient input to answer this research question. Nevertheless, the web-survey provided some other illustrations. For example, the majority of respondents (77%)

6 Defined as: “The purpose of the State aid rules for RDI is to contribute to smart, sustainable and inclusive growth by promoting state interventions which are aimed at alleviating market failures and which do not distort competition to a degree that is contrary to the common interest”.

7 Rules are regarded as ‘related’ if they e.g. concern definitions which are also used in State aid rules, such as the definition of SME.


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answered positively to the question whether they, considering their previous experience, will consider applying for RDI State aid funding in the future, again.

IV. Actual modifications in RDI State aid applications

Research question 2

When and to what extent are proposals for RDI activities modified in the period from their inception to the granting of public funding, in a manner which is detrimental, i.e. delays their commencement, reduces their scope or increases their cost?

According to the survey, approximately a quarter of respondents (i.e. 255 respondents) who applied for State aid for RDI activities in 2015-2017 had to make content-related changes in their applications, for any reason, irrespective of whether this was related to the RDI State aid rules or due to other reasons. It is important to note that, for this research question, this covers all changes, and no distinction is made, whether due to the rules on structural funds, RDI State aid rules, to adapt to funding priorities of the national scheme/policy, procedural requirements of the granting authority, and requirements by auditors or other. This indicates that a large majority of the respondents could implement their RDI activities as they originally planned.

In this context, it is relevant to mention that the main processes used for assessment of State aid applications in the selected Member States show a variation in the level of interaction between the applicant and the granting authority, which ranges from restricted interaction to a large degree of involvement of the granting authority at the pre-application phase.

The timing of requests for modification of State aid applications varies among the Member States. Depending on the amount of interaction during the pre-application phase, applicants receive content-related feedback either before or after the submission of the official application.

Many respondents (i.e. 113 respondents, 11%) reported that the modifications they had to make to their State aid applications had no effect on their planned projects. 134 respondents (14%) indicated that the requested change had an effect for the planned project. This covers all changes, irrespective of whether related to the RDI State aid rules or due to other reasons. Both positive and negative effects of the proposed changes were reported. Among negative effects of the modifications, delayed commencement of the project was mentioned most frequently, followed by reduction in size, reduction in scope and increased cost of the project. Positive effects of the requested modifications were also reported on the project (e.g. better definition and scoping).

The case studies show that there is a significant variety in the types of interaction with granting authorities and in the types of modifications that are requested. The latter range from few minor changes' related to budget across ‘some important changes' to the scope/ type of activities under the project and time schedule, to ‘significant changes' to, for instance, the dissemination plan.

V. Analysis of the underlying reasons for changes in applications

Research question 3 and 4

What exactly are the reasons for these changes? Are they the result of the need to comply with State aid rules, or of the need to comply with other requirements, imposed e.g. by the Member State or at European level? Examples of such other requirements could


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include rules on public procurement, the CPR Regulation (Structural Funds), Member State funding priorities, Member State procedural or other requirements or Member State rules on ethics;

If detrimental changes (delays, reduction in scope, increase in cost) are the direct result of the current State aid rules, which specific provisions of the State aid rules are most commonly concerned?

With regard to research question 3, the web-survey did not produce solid insights into the underlying reasons for modifications. Only a few respondents replied to the relevant questions on the legal reasons for modifications. Some of these respondents indicated that RDI State aid rules were the legal reason for modifications quoted by national granting authorities. Yet an equal number of respondents indicated that a different legal reason was given as a justification for modifications in their application. These survey results shall be treated with caution, particularly as the survey also demonstrated that respondents are not always aware of what legal rules govern their State aid applications.

Illustrative case studies provide some anecdotal evidence that some requested modifications relate to the RDI State aid rules. For example, national granting authorities requested changes based on the scope of RDI activities that actually qualify for State aid support or the type of eligible costs. However, other case studies suggest that the relation between the requested changes and RDI State aid rules is not very strong. Case studies also indicate that questions from (potential) applicants are primarily of a practical nature and (often) do not directly relate to the RDI State aid rules.

The case studies also suggest that, on an aggregate level, the requirements of RDI State aid rules are relevant, but that it is often also a matter of the practical implementation of the criteria. As a result, it is not possible, such as research question 4 asked, to identify specific provisions of the State aid rules which are most commonly concerned.

VI. Identification of evident patterns


Research question 5 and 6: Based on the gathered factual information under question 2-4; are there any evident patterns which indicate that individual provisions of the current State aid rules are: unduly burdensome in relation to the objective of these rules? If so, which ones? an obstacle to the attainment of the objective of these rules? If so, which ones?

Given the limited availability of factual evidence, it was not possible for the research team to identify any evident patterns which indicate that individual provisions of the current State aid rules for RDI activities are unduly burdensome or form an obstacle.


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Résumé opérationnel (FR)

I. Introduction et contexte de l'étude

Les activités de recherche, de développement et d'innovation (RDI) ont été identifiées par l'Union européenne (UE) comme un moteur essentiel de croissance et de création d'emplois. Le financement public national des activités de RDI, aux niveaux national et européen, joue un rôle crucial pour libérer tout le potentiel de recherche. Ce financement public est soumis aux règles de l'UE en matière d'aides d'État, plus spécifiquement au règlement général d'exemption par catégorie8 de 2014 (RGEC) et à l'encadrement des aides d'État à la recherche, au développement et à l'innovation de 2014 (encadrement RDI)9.

Il semble exister, pour certaines parties prenantes, une perception selon laquelle les règles en matière d'aides d'État peuvent avoir un impact négatif sur les activités de RDI, par exemple parce qu'elles sont difficiles à respecter, créent des coûts supplémentaires et des retards, et il n'est pas toujours clair si cette perception est liée au nouvel ensemble de règles simplifiées adoptées en 2014. Les critiques ayant tendance à rester générales et souvent fondées sur les expériences anecdotiques de certaines parties prenantes, la Commission Européenne a commandé cette étude d’ information qui, sur la base des preuves factuelles rassemblées, devrait permettre de mieux comprendre ce qui se passe réellement au niveau des projets individuels de RDI et des demandes d'aides d'État à la RDI.

Cette étude a été lancée en mai 2018 dans le but de rassembler et d'évaluer les éléments de preuve factuels10 établissant dans quelle mesure les règles de 2014 en matière d’aides d'État à la RDI ont un effet défavorable sur les activités de RDI d'une manière ou dans une mesure disproportionnée par rapport à l'objectif de ces règles. Afin d’atteindre l’objectif général de cette étude, six questions de recherche ont été posées au début de l’étude. Celles-ci sont présentées par section dans ce résumé.

II. Approche en vue de la collecte de preuves factuelles

L'équipe de recherche a contacté des autorités d’octroi dans sept11 États membres de l'UE sélectionnées dans le but de (i) recevoir un soutien pour l'identification et la prise de contact des demandeurs d'aides d'État et (ii) demander des preuves factuelles concrètes. Avec le soutien des autorités d’octroi, des autorités publiques et de l'Association européenne des organisations de recherche et de technologie (EARTO),

8 Règlement (UE) no 651/2014 de la Commission du 17 juin 2014 déclarant certaines catégories d'aides compatibles avec le marché intérieur en application des articles 107 et 108 du traité, JO L 187 du 26/06/2014.

9 Communication de la Commission - Encadrement des aides d'État à la recherche, au développement et à l'innovation, JO C 198 du 27/06/2014.

10 L'étendue des preuves factuelles à rassembler n'a pas été déterminée exactement au début du projet, mais comprend, par exemple, des échanges formels et informels entre les demandeurs (potentiels) et les autorités d’octroi, qui contiennent des informations en retour, des suggestions de modifications ou des instructions spécifiques de modifications des demandes d'aide d'État.

11 Afin de couvrir et d’adapter l’étude, sept États membres de l’UE ont été sélectionnés pour la collecte de données. Notre sélection s'est basée sur les éléments suivants : (1) sélection d'au moins trois États membres affichant les dépenses annuelles les plus élevées en aides d'État RDI en 2014 ou 2015, (2) équilibre entre petits et grands États membres, (3) couverture adéquate de l'Union européenne sur le plan géographique et (4) un équilibre entre les États membres ayant adhéré à l'Union européenne avant 2004 (UE15) et après 2004 (UE13) et ayant démontré (ou non) le respect de la conditionnalité ex ante pour les aides d'État. Les sept pays sélectionnés sont l'Autriche, la Belgique, la Bulgarie, la République tchèque, l'Estonie, la Pologne et l'Espagne. Plus de détails sont présentés à la section 1.2.1 du rapport principal et à l’annexe A.


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les demandeurs d'aides d'État de neuf pays12 ont été contactés via une enquête sur Internet et invités à partager leurs expériences et leurs points de vue. Au total, 1 183 répondants ont commencé à compléter le sondage et 911 ont répondu entièrement au sondage ; le reste a donné des réponses partielles. Sur la base des réponses au sondage en ligne, un groupe de répondants (78) a été identifié comme ayant dû apporter des modifications pertinentes à leurs demandes d'aides d'État et comme prêt à être recontacté, et a été sollicité pour fournir des preuves factuelles spécifiques.

L'enquête Web a abouti à un ensemble de données qui contribue à l'objectif global de l'étude. Cependant, les efforts pour rassembler des preuves factuelles concrètes (rendues anonymes) n'ont abouti qu'à quelques éléments de preuves factuelles non public. À quelques exceptions près, tant du côté des demandeurs d’aides d’État que des autorités d’octroi, la volonté et/ou la capacité de partager les informations nécessaires était limitée. Compte tenu des résultats de la collecte de preuves factuelles, il n’a pas été possible de répondre à toutes les questions de recherche comme prévu à l’origine. La taille de l'échantillon et les réponses reçues n’ont pas permis d’établir de solides observations statistiques. Pour les questions de recherche 4, 5 et 6 en particulier, les éléments de preuves factuelles disponibles étaient insuffisants pour permettre de tirer des conclusions et des idées solides et fiables.

III. Avis des parties prenantes : application pratique des règles d’aides d’État en matière de RDI

Question de recherche 1

En ce qui concerne l'objectif général13 des règles relatives aux aides d'État RDI : De l’avis des parties prenantes, les différentes dispositions des règles actuelles sur les

aides d’État en matière de RDI constituent-elles un obstacle à la réalisation de cet objectif ? Si oui, lesquelles et pourquoi?

De l'avis des parties prenantes, les différentes dispositions des règles actuelles d'aides d'État en matière de RDI sont-elles trop lourdes, c.-à-d. disproportionnées par rapport à la réalisation de cet objectif? Si oui, lesquelles et pourquoi?

La première partie de la question de recherche vise à déterminer si, de l'avis des parties prenantes, certaines dispositions des règles actuelles en matière d'aides d'État à la RDI constituent un obstacle. L'enquête Web a montré que les personnes interrogées ne sont souvent pas au courant des règles juridiques spécifiques qui régissent leurs demandes d'aides d'État. En conséquence, l'équipe de recherche n'a pas été en mesure d'identifier les opinions des parties prenantes sur la question de savoir si certaines dispositions des règles actuelles en matière d'aides d'État applicables aux activités de RDI constituent un obstacle. Diverses autorités d’octroi ont contribué à l'étude en exposant leurs expériences et/ou points de vue sur le fonctionnement des règles d’aides d'État en matière de RDI, ainsi que d'autres règles (connexes 9) dans la pratique quotidienne. Ces données varient par leur forme et leur niveau de détail, allant de déclarations générales accompagnées d'exemples à des exemples documentés très concrets. Ces avis se réfèrent, par exemple, à la définition des entreprises en difficulté, à la définition des activités économiques/non économiques et au cumul des aides. Les questions soulevées ne concernent pas directement les règles d’aides d'État en matière de RDI spécifiquement. Voir la section 2.2 du rapport principal pour plus de détails.

12 Outre les sept États membres sélectionnés, les autorités publiques / autorités d’octroi en France et en Norvège ont apporté leur soutien en diffusant l'enquête sur Internet auprès des demandeurs d'aides d'État RDI dans leur pays.

13 Défini comme : « Les règles sur les aides d'État en faveur de la RDI ont pour objectif de contribuer à une croissance intelligente, durable et inclusive en encourageant les interventions de l'État visant à pallier les défaillances du marché et qui ne faussent pas la concurrence de manière contraire à l'intérêt commun ».


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La deuxième partie des questions de recherche vise à déterminer si, de l'avis des parties prenantes, certaines dispositions des règles actuelles en matière d'aides d'État à la RDI constituent une charge trop lourde. Comme indiqué ci-dessus, la contribution des répondants individuels au sondage en ligne présente des limites claires pour l'identification de dispositions individuelles qui peuvent être perçues comme excessivement lourdes. En conséquence, le sondage en ligne ne fournit pas suffisamment de données pour répondre à cette question de recherche. Néanmoins, l’enquête Web a fourni d’autres illustrations. Par exemple, la majorité des personnes interrogées (77%) ont répondu positivement à la question de savoir si, compte tenu de leur expérience antérieure, elles envisageraient à nouveau de solliciter à l'avenir un financement pour les aides d'État RDI.

IV. Modifications effectives dans les demandes d'aides d'État RDI

Question de recherche 2

Quand et dans quelle mesure les propositions d'activités de RDI sont-elles modifiées d'une manière préjudiciable au cours de la période allant de leur création à l'octroi d'un financement public, c.-à-d. retarde leur commencement, réduit leur portée ou augmente leur coût?

D’après l’enquête, environ un quart des répondants (c.-à-d. 255 répondants) ayant demandé une aide d'État pour des activités de RDI en 2015-2017 ont dû apporter des modifications liées au contenu dans leurs demandes pour diverses raisons, que ce soient des raisons liées aux règles d’aides d’État en matière de RDI ou d’autres raisons. Il est important de noter que, pour cette question de recherche, cela couvre tous les changements, et aucune distinction n'est faite, que ce soit en raison des règles relatives aux fonds structurels, des règles relatives aux aides d'État RDI, pour s'adapter aux priorités de financement du régime / de la politique nationale, des exigences procédurales de l'autorité d’octroi, ou des exigences des auditeurs ou autres. Cela indique qu'une grande majorité des répondants ont pu mettre en œuvre leurs activités de RDI comme ils l'avaient initialement prévu.

Dans ce contexte, il est pertinent de mentionner que, dans l’ensemble, les principaux processus de préparation des demandes d’aide d’État dans les États membres sélectionnés font apparaître une variation du niveau d’interaction entre le demandeur et l’autorité octroyant les subventions, allant d’une interaction limitée à une large mesure d'implication de l’autorité d’octroi à la phase de pré-candidature.

Le moment des demandes de modification des demandes d'aide d'État varie d'un État membre à l'autre. En fonction du nombre d'interactions au cours de la phase de pré-candidature, les candidats reçoivent un retour sur le contenu avant ou après le dépôt de la candidature officielle.

Beaucoup de répondants (c.-à-d. 113 répondants, 11%) ont déclaré que les modifications qu'ils avaient dû apporter à leurs demandes d'aides d'État n'avaient eu aucune incidence sur les projets qu'ils envisageaient. 134 répondants (14%) ont indiqué que le changement demandé avait eu un effet sur le projet prévu. Cela couvre tous les changements, que ce soient pour des raisons liées aux règles d’aides d’État en matière de RDI ou d’autres raisons. Des effets positifs et négatifs des modifications proposées ont été signalés. Parmi les effets négatifs des modifications, des retards de démarrage du projet ont été mentionnés le plus souvent, suivis d'une réduction de taille, d'une réduction de la portée et d'une augmentation du coût du projet. Des effets positifs des modifications demandées ont également été signalés (p. ex., une amélioration de la définition et de la portée).


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Les études de cas montrent qu'il existe une grande diversité de types d'interactions avec les autorités d’octroi et de types de modifications demandées. Ces dernières vont de « quelques modifications mineures » liées au budget à « quelques modifications importantes » de la portée/du type d’activités prévues dans le projet et du calendrier, aux « modifications importantes », par exemple au plan de diffusion.

V. Analyse des raisons sous-jacentes aux modifications apportées aux demandes d’aides d’État

Questions de recherche 3 et 4

Quelles sont exactement les raisons de ces changements ? Sont-ils le résultat de la nécessité de se conformer aux règles sur les aides d'État ou de la nécessité de se conformer à d'autres exigences imposées p. ex. par l'État membre ou au niveau européen? Des exemples de telles autres exigences pourraient inclure les règles relatives aux marchés publics, le règlement CPR (Fonds Structurels), les priorités de financement des États Membres, les exigences de procédure ou autres des États Membres ou les règles d'éthique des États Membres;

Si des modifications préjudiciables (retards, réduction de la portée, augmentation du coût) résultent directement des règles actuelles sur les aides d'État, quelles sont les dispositions spécifiques des règles relatives aux aides d'État le plus souvent concernées?

En ce qui concerne la question de recherche 3, l’enquête en ligne n’a pas permis de mieux comprendre les raisons sous-jacentes des modifications. Seuls quelques répondants ont répondu aux questions pertinentes sur les raisons juridiques des modifications. Certaines de ces personnes ont indiqué que les règles d’aides d’État en matière de RDI étaient la raison juridique des modifications citées par les autorités nationales d’octroi. Pourtant, un nombre égal de répondants ont indiqué qu'une raison juridique différente avait été donnée pour justifier des modifications dans leur application. Les résultats de l'enquête doivent être traités avec prudence, car l’enquête a également montré que les répondants ne sont pas toujours au courant des règles juridiques régissant leurs demandes d'aides d'État.

Des études de cas illustratives révèlent certaines preuves anecdotiques selon lesquelles certaines modifications demandées ont trait aux règles d'aides d'État en matière de RDI. Par exemple, les autorités nationales d’octroi ont demandé des modifications en fonction de la portée des activités de RDI pouvant bénéficier d'un soutien sous forme d'aides d'État ou du type de coûts éligibles. Cependant, d'autres études de cas suggèrent que la relation entre les modifications demandées et les règles relatives aux aides d'État de RDI n'est pas très forte. Les études de cas indiquent également que les questions des demandeurs (potentiels) sont essentiellement de nature pratique et (souvent) pas directement liées aux règles d’aides d’État en matière de RDI. Les études de cas suggèrent également que, globalement, les exigences des règles relatives aux aides d’État de RDI sont pertinentes, mais qu’il s’agit souvent aussi d’une question de mise en œuvre pratique des critères. De ce fait, il n’est pas possible, à l’instar de la question de recherche 4 posée, d’identifier les dispositions spécifiques des règles relatives aux aides d’État qui sont le plus souvent concernées.

VI. Identification des tendances évidentes

Questions de recherche 5 et 6

Questions de recherche 5 et 6 : Sur la base des informations factuelles recueillies à la question 2-4 ; existe-t-il des tendances évidentes indiquant que les différentes dispositions des règles actuelles en matière d'aides d'État sont : une charge trop lourde par rapport à l'objectif de ces règles ? Si oui, lesquelles? un obstacle à la réalisation de l'objectif de ces règles ? Si oui, lesquelles?


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Compte tenu du peu de preuves factuelles disponibles, l'équipe de recherche n'a pas été en mesure d'identifier de tendances évidentes indiquant que certaines dispositions des règles actuelles en matière d'aides d'État applicables aux activités de RDI constituent une charge trop lourde ou un obstacle.


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1 Introduction to this study

Context and objective of the study

Context of the study14 Research, development and innovation (RDI) activities have been identified by the European Union (EU) as a key driver for growth and jobs. As part of the ‘Europe 2020 strategy for smart, sustainable and inclusive growth’15, the European Commission (Commission or EC) formulated the EU headline target that 3% of the EU's GDP should be invested in R&D in 2020. The use of State aid was seen as an important potential driver, as the Commission considered that State aid policy could “actively and positively contribute to the Europe 2020 objectives by prompting and supporting initiatives for more innovative, efficient and greener technologies, while facilitating access to public support for investment, risk capital and funding for research and development”.16

As part of the Europe 2020 strategy, the flagship initiative ‘The Innovation Union’ was launched.17 In this strategy document, the Commission announced that a mid-term review of the State aid RDI rules was planned in order to assess which forms of innovation could be properly supported.18 In the context of the broader ‘State aid modernisation’ (SAM) programme19, this resulted in 2014 in the publication of the revised General Block Exemption Regulation (GBER)20 and the revised Framework for State aid for research and development and innovation (RDI Framework)21. A brief description of the GBER and RDI Framework is provided in Box 1.

Box 1: Description GBER and RDI Framework22 • The GBER makes it possible for Member States to implement aid measures in support of

RDI activities without prior notification to the Commission, provided that certain criteria are met. As part of the State Aid Modernisation process, the scope of the GBER was broadened further, and includes (i) aid for research infrastructures, (ii) innovation clusters and (iii) process and organisational innovation. In addition, the notification thresholds for R&D projects have been doubled and other conditions, such as those for support to prototypes and pilot projects, have been simplified and streamlined. As a result, the vast majority of State aid for RDI activities is now implemented under the GBER;

• The RDI Framework sets out the Commission's assessment criteria for the remaining cases, which are not block-exempted under the GBER. These are cases which, for example because of the significant aid amounts involved, require an individual assessment by the Commission in order to ensure that the right balance is struck between the promotion of RDI activities and the protection of competition. As a result of the broader scope of the new GBER, very few cases now require such individual assessment, and since 2014 the Commission has received fewer than 10 notifications.

14 Based on the tender specifications for this study, COMP/2017/014. 15 European Commission, ‘Europe 2020 - strategy for smart, sustainable and inclusive growth’, COM (2010)

2020, March 2010. 16 Ibid, page 18/19. 17 European Commission, ‘Europe 2020 - Flagship Initiative Innovation Union’, SEC (2010) 1161. 18 Ibid, page 17 (commitment number 13). 19 European Commission, ‘EU State Aid Modernisation (SAM)’, COM (2012) 209 final, March 2012. 20 European Commission, ‘Framework for State aid for research and development and innovation’, 2014/C

198/01. 21 European Commission, ‘Commission Regulation (EU) No 651/2014 declaring certain categories of aid

compatible with the internal market in application of Articles 107 and 108 of the Treaty’, June 2014. 22 Based on the tender specifications for this study, COMP/2017/014.


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There appears to be a perception in some quarters that State aid rules can have a negative impact on RDI activities, for example because they are perceived as difficult to comply with, create additional costs and cause delays. This perception is for example formulated in the 2015 ENIRI Report23, which covered the period before 2014, and the 2017 report of the High Level Expert Group monitoring simplification for beneficiaries of ESI Funds24, while the 2017 report of the Lamy High Level Group states in general terms that "the current State Aid rules are perceived as insufficiently innovation-friendly"25.

As criticisms tend to remain at a general level, or do not relate directly/ specifically to the RDI State aid rules, and are often based on the anecdotal experiences of some stakeholders, the European Commission commissioned this fact-finding study which, based on collected factual evidence (see next section), should result in a better understanding of what actually happens at the level of individual RDI projects and RDI State aid applications. Based on the factual evidence various research questions will be answered, for example the question when and to what extent proposals for RDI activities are modified and result in significant changes, as well as the question what the underlying reasons for these changes are and to what extent they relate to the RDI State aid rules. Please note that the scope and character of this study differs from the aforementioned studies: in this study there is some reporting of the views and experiences of stakeholders, but the main objective is to interpret the provided factual evidence. The time dimension is important to take into account here: as the revisions of the State aid modernisation of 2014 materialised in the last couple of years, the main focus is on the period 2015-2017 (which clearly differs from the pre-2014 situation). Objective and research questions This study was launched in May 2018 with the objective to collect and assess factual evidence on the extent to which, if any, the 2014 RDI State aid rules have a detrimental effect on RDI activities in a manner or to a degree which is disproportionate to the objective of these rules.26 The actual scope of the factual evidence is described in Box 2.

Box 2: description of the scope of the factual evidence27 The scope of the factual evidence to collect was not determined exactly at the start of the project, but required in particular the following type of documents: • Formal and informal exchanges between applicants or potential applicants and granting

authorities, which contain feedback, suggestions for changes or specific instructions for modifications on grant applications at any stage before or during the formal application process (such as letters, e-mails, records of meetings and conversations);

• Formal and informal internal documents of the granting authority relating to changes suggested, required or made to an aid application before or during the formal application process;

• Formal and informal internal documents of applicants or potential applicants relating to changes suggested, required or made to an application for public support before or during the formal application process;

23 Bird & Bird, 'State aid support schemes for RDI in the EU's international competitors in the fields of

Science, Research and Innovation', study commissioned by the European Commission (Directorate-General for Research and Innovation), November 2015; web link: https://ec.europa.eu/proarammes/horizon2020/sites/horizon2020/files/full einri final study report.pdf.

24 High Level Expert Group, 'ESIF Simplification: HLG proposal for policymakers for post-2020', web link: http://ec.europa.eu/regional policv/en/information/publications/reports/2017/esif-simplification-hlg- proposal-for-policvmakers-for-post-2020.

25 High Level Group (Lamy), 'Report of the independent High Level Group on maximising the impact of EU Research & Innovation Programmes', 2017, p. 17.

26 Defined as: “The purpose of the State aid rules on RDI is to contribute to smart, sustainable and inclusive growth by promoting state interventions which are aimed at alleviating market failures and which do not distort competition to a degree that is contrary to the common interest”.

27 Based on the tender specifications for this study, COMP/2017/014.

https://ec.europa.eu/proarammes/horizon2020/sites/horizon2020/files/fullhttp://ec.europa.eu/regional


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Box 2: description of the scope of the factual evidence27 • Formal or informal exchanges between applicants or potential applicants and granting

authorities setting out why an application for public support has been rejected, discouraged or discontinued;

• Internal documents of applicants or potential applicants relating to rejected applications or planned applications which were not pursued, including in particular internal follow-up (e.g. cancellation of project, continuation of project without aid etc.).

In order to reach the overall objective of this study, the following six research questions were posed at the start of the study:

Research question 1: The purpose of the State aid rules on RDI is to contribute to smart, sustainable and inclusive growth by promoting state interventions which are aimed at alleviating market failures and which do not distort competition to a degree that is contrary to the common interest.: In the opinion of stakeholders, do individual provisions of the current State aid

rules on RDI present an obstacle to the attainment of this purpose? If so, which ones and why?

In the opinion of stakeholders, are individual provisions of the current State aid rules on RDI unduly burdensome, i.e. disproportionate in relation to the attainment of this purpose? If so, which ones and why?

Research question 2: When and to what extent are proposals for RDI activities modified in the period from their inception to the granting of public funding, in a manner which is detrimental, i.e. delays their commencement, reduces their scope or increases their cost?

Research question 3: What exactly are the reasons for these changes; in particular, are they the result of the need to comply with State aid rules, or of the need to comply with other requirements, imposed e.g. by the Member State or at European level? Examples of such other requirements could include rules on public procurement, the CPR Regulation (Structural Funds), Member State funding priorities, Member State procedural or other requirements or Member State rules on ethics;

Research question 4: If detrimental changes (delays, reduction in scope, increase in cost) are the direct result of the current State aid rules, which specific provisions of the State aid rules are most commonly concerned?

Research question 5 and 6: Based on the gathered factual information under question 2-4; are there any evident patterns which indicate that individual provisions of the current State aid rules are:

unduly burdensome in relation to the objective of these rules? If so, which ones?

an obstacle to the attainment of the objective of these rules? If so, which ones?

The set-up of this report follows the structure of these research questions. Chapter 2 relates to research question 1 and describes the various stakeholder opinions about the application of the RDI State aid rules in practice. Chapter 3 describes in more detail when and to what extent State aid applications for RDI activities are modified (in both a positive and detrimental manner; research question 2). The focus of Chapter 4 lies on the underlying reasons for changes in State aid applications as well as the concerned specific provisions of the RDI State aid rules (research questions 3 and 4). We conclude in Chapter 5 with some reflections on research questions 5 and 6, but in essence the collected evidence is insufficient to answer these research questions.


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In addition to the main chapters, three annexes were prepared with more detailed information on:

Annex A: detailed description of the followed methodology for information/data gathering;

Annex B: overview of information received from State aid applicants; Annex C: overview of the questions and results of the web-survey among State

aid applicants.

The collection of factual evidence: what were the results?

As indicated, the objective of this study was to collect and assess factual evidence on the extent to which the RDI State aid rules have a detrimental effect on RDI activities. Given this objective, the study paid significant attention to the identification and contacting of State aid applicants which could provide information/factual evidence on when, and to what extent, original RDI project had to be modified (research question 2), what the underlying reasons for the modifications were (research question 3) and whether these reasons were related to the RDI State aid rules (research question 3/4). In addition, relevant national or regional granting authorities were contacted. Beside their support in the identification of potential State aid applicants, they were also asked to provide relevant factual evidence for the purpose of this study. If needed, there was the opportunity to provide this factual evidence in an anonymised way and/or under a strict confidentiality agreement with the research team.

The support of the granting authorities made it possible to reach out to a substantial group of (potential) State aid applicants, which resulted in more than 1,150 respondents to the web-survey. However, both for the State aid applicants and granting authorities, the data collection resulted in limited specific factual evidence / documentation, which was the main objective. For the State aid applicants, the main reason seems to be the overall low number of applicants who (i) received feedback from a granting authority on the content of the application and (ii) had to make substantial changes. More details on the actual number are presented later in this section. For the granting authorities, various reasons were provided by them: (i) lack of examples/documents which show modifications and/or reasons for modifications, (ii) inability to share relevant examples due to data protection rules (despite the option to provide anonymised documents or use a strict confidentiality agreement) and (iii) a lack of capacity to contribute to the study. Within the scope of this study, the research team had to accept these given reasons, as there were no alternative ways to collect non-public factual evidence.

A reflection on the results of the data collection is presented in section 1.2.2, after a more general description of the data collection approach followed in section 1.2.1. A summary of these process-related results is presented here (box 3).


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Box 3: Summary of the main findings / results • The research team approached granting authorities in seven selected28 EU Member States

with the aim to (i) receive support in the identification and contacting of State aid applicants, and (ii) request specific factual evidence. With the support of the granting authorities, public authorities and the European Association of Research and Technology Organisations (EARTO), State aid applicants in nine countries29 were approached via a web-survey and asked to share their experiences and views. In total, 1,183 respondents participated in the survey, of which 911 completed all questions; the rest gave partial answers. Based on the answers to the web-survey, a group of respondents (78) was approached with requests to provide specific factual evidence;

• The web-survey resulted in a dataset that contributes to the overall objective of the study. However, the efforts to collect (anonymised) specific factual evidence resulted in only a few items of non-public factual evidence. With a few exceptions, both from the side of the State aid applicants and granting authorities, the willingness and/or ability to share the necessary information was limited. Given the results of the collection of factual evidence, it was not possible to answer all research questions in the way in which it was originally intended. Particularly for research questions 4, 5 and 6 the available factual evidence was insufficient to derive solid and reliable insights and conclusions.

1.2.1 Description research approach for collection factual evidence

The next figure (Figure 1.1) provides a graphic description of the activities that have been undertaken as part of the information gathering process. The various phases are described briefly here, and more details are presented in Annex A, B and C.

28 In order to scope and tailor the study, seven EU Member States were selected for the data collection. This selection was based on four main criteria: (1) selection of at least three Member States with the highest annual spending on RDI State aid in 2014 or 2015, (2) a balance between small and large Member States, (3) adequate coverage of the European Union in terms of geography and (4) a balance between Member States that joined the EU before 2004 (EU15) and after 2004 (EU13) and demonstrated (or not) compliance with ex ante conditionality on State aid. The seven selected countries are Austria, Belgium, Bulgaria, Czechia, Estonia, Poland and Spain.

29 In addition to the seven selected Member States, public authorities / granting authorities in France and Norway provided their support in distributing the web-survey among RDI State aid applicants in their countries.


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Figure 1.1 Overall methodology for data collection and analysis

Phase 1: preparation of the data collection Country selection - In order to scope and tailor the study, seven EU Member States were selected for the data collection. This selection was based on four main criteria: (1) selection of at least three Member States with the highest annual spending on RDI State aid in 2014 or 201530, (2) a balance between small and large Member States, (3) adequate coverage of the European Union in terms of geography and (4) a balance between Member States that joined the EU before 2004 (EU15) and after 2004 (EU13) and demonstrated (or not) compliance with ex ante conditionality on State aid. Based on these criteria, the following Member States were selected: Austria (AT), Belgium (BE), Bulgaria (BG), Czechia (CZ), Estonia (EE), Poland (PL) and Spain (ES). More details about this selection are presented in Annex A.

Interaction with Granting Authorities & preparation web-survey - Granting authorities were contacted for the identification of individual applicants for RDI State aid which could be approached via the web-survey, as well as the sharing of relevant factual evidence. In total, we reached out to 42 granting authorities, mainly at the national and/or regional level. For the purpose of the web-survey, we received in many cases support from granting authorities which (i) either shared contact details, i.e. e-mail addresses of applicants or (ii) distributed the link to the web-survey on our behalf via their own system (mainly due to data protection reasons). Additionally, in Austria and Poland we searched company registers and State aid registers and compiled a database of survey respondents who then were approached by us with survey invitations.

Although France and Norway were not included in our selection of seven Member States for this project, their public authorities demonstrated strong interest in the study and provided their support in distributing the link of the web-survey among RDI

30 Based on the Commission’s State Aid Scoreboard. RDI State aid spending was considered in relation to national GDP. A selection based (only) on absolute amounts, would result in a bias towards countries with larger budgetary means.


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State aid applicants in their country. As with the other Member States, they also had the possibility to provide factual evidence (if available). Phase 2: data collection among State aid applicants and granting authorities Launch of the web-survey to State aid applicants - The survey was launched on 18 June 2018 in nine languages.31 Potential RDI State aid applicants were approached via a direct e-mail invitation (~ 3,350), via the granting authorities (number less clear, around 6,25032) or via the European Association of Research and Technology Organisations (EARTO). In total, 1.183 respondents commenced with the survey, which provides a response rate to the survey (i.e. relation of the invitations distributed to the response received) of about 12%. As the web-survey also served as an instrument to identify a specific group of respondents, the number of respondents decreased throughout the web-survey. The question as to whether an applicant received any feedback from the granting authority (question 17) was answered by 800 respondents. See Annex B for more details on the actual response.

Request to State aid applicants for factual evidence - The web-survey was used as a method to identify those respondents who had to make changes (for any reason, irrespective of whether this was related to the RDI State aid rules or due to other reasons) to their RDI State aid applications after interaction with their granting authority. The respondents who had to make changes in their applications were asked for explanations and factual evidence, which would allow for the analysis of the underlying reasons (research questions 3 and 4). In practice, this latter group turned out to be relatively small (see box 4).

Based on the responses in the web-survey, a group of 78 respondents was identified, which (i) had to make changes and (ii) agreed to be contacted again.33 This sample of companies was contacted again with a request to provide factual evidence, and covered respondents from six different Member States.34

Box 4: Identification of those respondents who had to make changes After a few first selection questions, 1,023 respondents indicated that they actually applied for RDI State aid or considered it in 2015-2017 (Question 3). There was a group of ~480 respondents which received content-related feedback from the granting authority, of which approximately 53% (n=255) received a request/suggestion to make specific changes to the application (Question 19+20). This covers any changes, irrespective of the reason for the change. From the group of respondents who received such a request for a change (n= 255) the majority indicates that the changes qualify in fact as ’no particular change' or as 'minor change' (n = 117). 123 respondents indicated they made an 'important' or 'significant' change, but the type of change differs. For the largest type of changes (i.e. budget changes and scope changes), this refers to 35-40 respondents in all selected Member States.

Request to granting authorities for factual evidence - As indicated, we approached 42 national granting authorities with the request to share factual evidence

31 The languages covered are: Bulgarian, Czech, Dutch, English, Estonian, French, German, Polish and

Spanish. 32 It is unclear how many potential State aid applicants were invited in France, as the distribution of the

web-survey was arranged indirectly via the French authorities and subsequently via a few associations representing individual companies. The number of respondents (270) and an assumed response rate of 10-20% (based on the response for the other selected Member States), results in an estimated number of invites between 1,350 and 2,700.

33 Respondents were asked at the end of the web-survey (question 43) whether they agreed to be contacted again by the research team in order to provide more information.

34 From Estonia, Poland and Norway there were no respondents who both adjusted the content of their application and gave their permission to be contacted again.


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(in addition to the question to help distribute the web-survey). After the first request for factual evidence in June/July, this request was repeated in September.

This time, the request for factual evidence was broadened to specific public documents / reports, as limited material was received so far. These new categories of documents were considered relevant and useful for the purposes of the study even though they were outside the scope of the factual evidence initially targeted. See Annex A and C for more details on the actual process and response. In general, the following types of inputs were received:

Various inputs (e-mails, letters, verbal explanations) which mainly reflect the experiences and views of granting authorities in relation to the functioning of the RDI State aid rules in their own practice/context. Where relevant, we present these inputs as 'stakeholder opinions' (Chapter 2);

Various contributions in the form of (web-links to) public and non-public documents, which, for example, describe in more detail the application process (i.e. procedural rules, criteria to qualify for public support, cost calculation rules, etc.) or present answers to typical questions by applicants. The majority of these documents did not provide the preferred factual evidence and could not be used to answer the research questions; some documents were used to describe the various application procedures (see Chapter 3) and on a few occasions, the documents could be used as illustrative case study (see Chapter 3 and 4);

On a few occasions only, we received the specific factual evidence as originally intended. This factual evidence was used for the illustrative case studies35 in Chapter 3.

The interaction with the granting authorities showed that the data protection rules, both at European and national level, limited the extent to which granting authorities thought they were able to contribute. These positions seem to some extent related to the entry into force of the General Data Protection Regulation (GDPR) on 25 May 2018, which raised the general awareness of data protection. Despite the possibility to provide anonymised factual evidence or to sign a strict confidentiality agreement, various granting authorities did not see the (legal) possibility to share information on the level of individual application procedures with the research team. Phase 3 and 4: data assessment and reporting After the finalisation of phase 1 and 2, the collected information and factual evidence were analysed in order to answer the six research questions and prepare the final report. In this context 25 case studies/examples were selected to illustrate the findings and conclusions of the analysis. These case studies are based on the collected factual evidence and presented in Chapter 3 and 4.

1.2.2 Results of the collection of factual evidence

Before the research questions are answered in Chapters 2-5, it is important to present our conclusions based on the results of the collection of factual evidence, which was the main objective of this study. A few main conclusions can be drawn here.

Approach gave access to individual State aid applicants, however... The support from national granting authorities made it possible to approach individual State aid applicants and collect a variety of data useful for the overall objective of the study. In order to illustrate this: the survey question whether an applicant received

35 The selection of case studies was primarily based on the available factual evidence/information. Besides

that, the research team took (if possible) into account the company size, the country of origin and the type of granting authority.


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any feedback from the granting authorities was answered by approximately 800 respondents. This led to the identification of a group of respondents who actually experienced modifications to their proposals (especially relevant for research question 2 and 3).

... this did not result in the sharing of the (desired) factual evidence This approach allowed us to focus our efforts on the stakeholder group that (as we assumed) held the most relevant documentary evidence necessary for the study, but this did not result in obtaining the desired evidence. Only a relatively small group of 78 respondents who had to make changes agreed to be re-contacted to provide further information for the research team. Once this group was re-contacted with requests for clarifications and documentary evidence, only 26 replied. These replies fell into four categories of requested modifications, of which only the last group provided factual evidence/ documents:

Respondents who indicated that they were requested to complete their applications, correct an error or provide more details on a specific element of the application. In these cases, no documentary evidence could be requested;

Respondents who explained that the feedback was given by phone or in a personal meeting, meaning that no documentary evidence existed;

Respondents who were reluctant to share documents due to confidentiality reasons, but gave some explanations; and

Respondents who shared documents (very limited).

In addition: lack of factual evidence from side of granting authorities Our alternative route of document collection via national granting authorities resulted in mixed results. On the one hand, we received quite useful input from some of the authorities. On other hand, we faced a limited willingness and/or ability of national granting authorities to share documents related to individual RDI State aid applications. One of the most important reasons for this are national data protection rules, on the basis of which authorities felt prevented from sharing even anonymised documents. This is linked to the lack of capacity of granting authorities to make the necessary redactions. Another important reason seems to lie in the national procedures for application for State aid: due to digitisation of the application process, some national authorities have very limited contact with applicants and do not have an opportunity to request significant content-related changes in State aid applications. Yet another reason is that some granting authorities work with applicants in person and do not send documents.

Results limit the extent to which the research questions could be answered Given the results of the collection of factual evidence it was not possible to answer all research questions in the way it was originally intended. Particularly for research questions 4, 5 and 6, the available factual evidence was insufficient to derive solid and reliable insights and conclusions. Chapters 2-5 describe this per research question in more detail. This experience shows that (in the future) alternative research approaches should be considered in order to collect this type of (confidential) factual evidence.


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2 Stakeholder opinions: the application of the RDI State aid rules in practice (research question 1)

Introduction and main findings

This chapter relates to research question 1 and describes the various stakeholder opinions about the application of the RDI State aid rules in practice and to what extent provisions are perceived as an obstacle or unduly burdensome. The exact research question is presented in box 5.

Box 5: Research question 1 Research question 1: With regard to the overall purpose36 of the RDI State aid rules: • In the opinion of stakeholders, do individual provisions of the current State aid rules on

RDI present an obstacle to the attainment of this purpose? If so, which ones and why? • In the opinion of stakeholders, are individual provisions of the current State aid rules on

RDI unduly burdensome, i.e. disproportionate in relation to the attainment of this purpose? If so, which ones and why?

This chapter starts with the question as to whether individual provisions present an obstacle in the opinion of stakeholders (section 2.2), followed by the question on whether individual provisions are thought of as unduly burdensome (section 2.3). The summary of the main findings with regard to the research question is presented in box 6 below. NB: Please note that Chapters 3 and 4 also provide more details on the relevance of individual provisions.

Box 6: Summary of the main findings • The first part of the research question asks whether, in the opinion of stakeholders,

individual provisions of the current State aid rules on RDI present an obstacle. The web-survey demonstrated that individual respondents are often not aware of the specific legal rules that govern their applications. As a result, the research team was unable to identify specific stakeholder opinions as to whether individual provisions of the current State aid rules for RDI activities form an obstacle. Various granting authorities contributed to the study by bringing forward their experiences and/or views on the functioning of the RDI State aid rules, as well as other (related37) rules, in the day-to-day practice. These inputs vary in form and level of detail from general statements with examples to some specific documented examples. These opinions refer, for instance, to the definition of undertakings in difficulty, definition of economic/non-economic activities and cumulation of aid. The issues raised do not relate directly to the RDI State aid rules specifically. See section 2.2 of the main report for more details;

• The second part of the research questions asks whether, in the opinion of stakeholders, individual provisions of the current State aid rules for RDI activities are unduly burdensome. As indicated, the input from individual respondents to the web-survey has clear limitations for the identification of individual provisions which may be perceived as unduly burdensome. As a result of this, the web-survey does not provide sufficient input to answer this research question. Nevertheless, the web-survey provided some other illustrations. For example, the majority of respondents (77%) answered positively to the question whether they, considering their previous experience, will consider applying for RDI State aid funding in the future, again.

36 Defined as: "The purpose of the State aid rules on RDI is to contribute to smart, sustainable and inclusive

growth by promoting state interventions which are aimed at alleviating market failures and which do not distort competition to a degree that is contrary to the common interest".

37 Rules are regarded as “related” if they e.g. concern definitions which are also used in State aid rules, such as the definition of SME.


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Stakeholder opinions: do the RDI State aid rules (i.e. individual provisions) present an obstacle?

The first part of research question 1 asks whether, in the opinion of stakeholders, individual provisions of the current State aid rules for RDI activities present an obstacle to the attainment of the overall purpose of these rules (and if so, which ones and why). While the individual respondents of the web-survey were not able to provide a specific opinion about (perceived) obstacles, various granting authorities did provide their opinions.

Insights from web-survey: hardly opinions on obstacles provided Individual respondents answered a variety of questions related to the areas of the study in the web-survey (see Annex C for more details). Besides specific questions about the moment, type and extent of modifications (relevant for research question 2), the research team also asked for the underlying reasons for these modifications (relevant for research questions 3 and 4). The web-survey showed that, on the one hand, the majority of the respondents were not requested to make any substantial changes (see Chapter 3). On the other hand, the survey also demonstrated that respondents are often not aware of the specific legal rules which determine their application.38 As a result of this, we were not able to identify specific stakeholder opinions whether individual provisions of the current State aid rules on RDI are an obstacle.39

Inputs from granting authorities: various types of challenges brought forward Various granting authorities contributed to this study by bringing forward their experiences and/or views on the functioning of the RDI State aid rules, as well as other (related) rules, in the day-to-day practice. Their main inputs can be categorised in six different themes and are presented in further detail below. We emphasise that these are opinions and views of different national granting authorities, based on their experiences; these opinions were not analysed any further by the research team and do not constitute (legal) analysis of any of the State aid rules mentioned.

Table 2.1 Overview provided opinions granting authorities

Themes Remarks Undertakings in difficulty (UID)

• A few granting authorities referred explicitly to the classification of ‘undertakings in difficulty’ (UID) as one of the main current obstacles to the attainment of the overall purpose of the RDI State aid rules. This refers to the general rule that State aid (with a few exemptions) cannot be granted to applicants which classify as ‘undertakings in difficulty’40; see for example Art. 1 (4) GBER;

• The granting authorities indicate that the current set-up of the rules results in situations where (often new) companies with a long-term RDI horizon classify as an UID, as the enterprise uses a lot of investment capital ('cash burners'). The classification as UID implies that they

38 For example: the survey respondents were asked whether they applied under the GBER, RDI State aid

Framework or ad hoc State aid. After the revision of the State aid regime in 2014, most applications fall under the GBER, which is clearly not reflected in the responses. See section 4.2 for more details.

39 Only one respondent provided a relevant comment that, however, related not to individual provisions, but to the RDI State aid framework in general. The respondent commented on the necessity to strengthen the global level-playing field, especially in the field of RDI State aid. In this context the respondent suggested that, like in merger control, an initial (simplified) assessment of the economic impact of the RDI State aid on the market should be made directly after the notification. If the impact is expected to be limited, the permission can be granted shortly after the notification. Otherwise, a more extensive assessment can be made.

40 The definition is given in paragraph 20 of the ’Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty', 2014/C 249/01.


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Themes Remarks cannot be supported with public RDI funding, while their actual situation differs from enterprises which face a bankruptcy, for example due to changing market conditions. The classification as UID may also be triggered by the financial situation of the parent company. One granting authority provided a few specific examples, which are presented in Chapter 4 (case studies 21-23).

Definition of economic/ non-economic activity & non-profit

• Two granting authorities indicate that the distinction between (1) research and knowledge dissemination organisations on the one hand and (2) undertakings / enterprises on the other hand does not always match with the actual situation. Especially in situations where there are non-profit organisations involved, it is not always evident that these organisations can be seen as either a research organisation or as an enterprise which carries out economic activities. In addition: if activities classify as ’non-economic', they do not fall under the State aid rules and can receive 100% funding. While the State aid rules give room for the funding of non-profit organisations41, the grating authorities are not always sure how to interpret the factual situation (Is there an actual market? Do these activities classify as economic activity? Etc.). Often these non-profit organisations have limited funding, which makes it difficult for them to contribute significantly to RDI projects. One granting authority provided a few specific examples, which are presented in Chapter 4 (case studies 24-25).

Definition of economic/ non-economic activity & research organisations & public administrations

• Two granting authorities point at interpretation difficulties in practical situations where a research organisation or research infrastructure is used for both economic and non-economic activities;

• In this type of situation, the research organisation needs to ensure that the economic activities do not exceed 20% of the total allocated capacity.42 One granting authority indicates that interpretation difficulties relate for example to the determination of the capacity (e.g. based on machine hours, person hours, revenues, budget?), but also to the separate cost accounting and determination of relevant cost units. They indicate that the relevant actors (e.g. large universities, research institutions, testing institutes, etc.) do not always have a suitable accounting system that would allow for the required separate cost accounting. They question whether funding recipients should be asked to buy an (expensive) accounting system, even though they can represent the individual cost units;

• Another granting authority points to the position of university hospitals, which include both research activities and (academic) health care. It indicates that it is very difficult to make a clear distinction between the economic and non-economic activities within the integrated university/hospital structure. It also observes that in some situations individual persons (physicians) have a double role;

• In addition, one granting authorities points at difficulties with the categorisation of public authorities: besides their regular public service activities, (local) public authorities sometimes also carry out (semi-) economic activities. In a situation where such a public authority is involved in a RDI project, it is difficult to determine the exact size and scope of the economic activities and whether or not there are risks for market distortion.

Time horizon & uncertainty

• In relation to the previous theme, one granting authority indicates that they observe a specific obstacle with regard to the long term RDI projects. The 20% limit for non-economic activities, mentioned above, is sometimes problematic for long-term projects because the size of the

41 See for example: Commission Notice on the notion of State aid as referred to in Article 107(1) of the TFEU, C/2016/2946, paragraph 9.

42 See: RDI Framework, paragraph 20.


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Themes Remarks economic activities can change (drastically) during the project. It should be ensured, however, that the aid recipient does not exceed the 20% limit for economic activities over the entire duration of the project in every year of the project and if this limit is exceeded, subsidies must be reduced or repaid. This means that if the aid recipient is particularly successful due to its RDI activities (from an economic point of view), it may have to return part of the funding as a result. This uncertainty may result in a negative incentive for companies towards RDI.

Distinction between types of research

• One granting authority noted that the distinction between experimental development and industrial research is not always very clear, especially where a project involves the development of prototypes/installations to be used commercially. No specific examples or factual evidence was provided to the research team.

Cumulation of aid

• According to Art. 8 (1) GBER, in determining whether the notification thresholds in Art. 4 and the maximum aid intensities in Chapter III are respected, the total amount of State aid for the aided activity or project or undertaking shall be taken into account. One granting authority indicates that the interpretation of this provision is sometimes difficult, for example, in case of de minimis aid. While Art. 8 (5) GBER stipulates that de minimis aid must not be subsidised additionally, it is unclear to what extent (unrelated) subsidies need to be cumulated. Another difficulty in the interpretation of cumulation results from the company level State aid vs. project level State aid. For example, if a company receives an employment aid, and the thus funded employee then works on another project that is applying for funding, the two fundings have nothing to do with each other in terms of content but are added together for the sake of cumulation. It is not clear whether cumulation is a matter of effective funding, funding for a certain project or funding for the whole company or group of companies.

SME definition • Granting authorities in three Member States indicated that modifications are sometimes related to the legal definition of SMEs. Currently, applicants often assume that they are classified according to the local business code and are not aware they should use the EU definition (and, therefore, may not qualify as a SME). This is solved by the granting authorities checking on the actual SME status of undertakings, but may result in the ‘reclassification’ of the State aid applicant and consequently a revision of the application. This example shows that that definition issues may have an effect on the State aid application, while the specific legal basis (i.e. the EC recommendation on SME definitions43) falls outside the scope of the RDI State aid rules.

Stakeholder opinions: are the RDI State aid rules (i.e.

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