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Seminar on State Aid in RDI, 27 January 2016, Brussels – Summary

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Seminar on

State Aid in Research, Development and Innovation (RDI) projects co-financed from the European Structural and Investment Funds (ESIF)

27 January 2016

Brussels

The seminar agenda, all presentations and background documents can be found on DG REGIO website:

http://ec.europa.eu/regional_policy/index.cfm/en/conferences/state-aid/rdi/

Summary of the presentations and discussions

09h00-09h15 Opening and welcome

Pascal Boijmans, Head of Unit, Directorate-General for Regional and Urban Policy, European Commission

Pascal Boijmans (PB) opened the meeting and introduced the topic of the discussion. He informed that the seminar was organised as part of the European Commission’s State Aid Action Plan which has been put in place between the Directorate-General for Regional and Urban Policy (DG REGIO) and the Directorate-General for Competition (DG COMP). This initiative is aimed at offering pro-active support to Member States (MSs) and regions in order to help them to apply the new state aid rules correctly.

The new Regulation on State aid in RDI1, as part of the State Aid Modernisation Package, entered into force on

1 July 2014, i.e. at the beginning of the 2014-2020 programming period. This provided MSs with a new set of rules but also involved an increased level of uncertainty on how to interpret and apply them. Innovation has acquired an increasing role for 2014-2020 Cohesion policy and it is expected that a larger number of projects will require the involvement of State aid. In addition, an ex-ante conditionality in respect of State aid was set as a prerequisite for the implementation of the Operational Programmes in the new Cohesion policy regulation.

The main activities undertaken within the State Aid Action Plan have been the organisation of country seminars in 2015 in those MSs (Croatia, Romania, Czech Republic, Slovakia and Bulgaria) which did not fulfil the ex-ante conditionality on State aid.

In addition, thematic seminars will be organised in the course of 2016 – the seminar on State aid in RDI is the first one – which will focus on relevant areas for the application of State aid. These are aimed at disseminating knowledge and clarifying aspects of the new regulation in order to improve expertise within MSs.

1 Commission Regulation (EU) No 651/2017 of 17 June 2014 (General Block exemption Regulation - GBER) and the Framework for state aid

for research, development and innovation (Communication for the Commission, C(2014)3282, 21.5.2014.



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09h15-10h15 State aid rules for Research, Development and Innovation

Paolo Cesarini, Directorate-General for Competition, European Commission

Paolo Cesarini (PC) presented the main rules of the new General Block Exemption Regulation (GBER) and the

related Framework for State aid in RDI. The main topics of the presentation were:

the presence of State aid in typical RDI situations

Aid for RDI projects

Aid for RDI Infrastructures

Innovation Aid

He presented three typical situations which may occur in the implementation of Structural Funds in respect of

RDI and which involve State aid rules:

public funding for economic activities of research organisations (ROs) and research infrastructures

(RIs)

RDI services and contract research supplied to industry by publicly financed ROs/RIs

RDI collaboration between publicly financed ROs/RIs and industry

Public funding of ROs/RIs

In general, most research organisations are publicly funded and invest, in the majority of cases, in activities that

can be classified as non-economic in nature. Nevertheless, the distinction between non-economic and

economic activities is not always straightforward and thus some clarification is useful:

Non-economic activities (point 19 of the Framework) include primary activities, defined as (i) public

education organised within the national educational system, (ii) independent RDI including

collaborative RDI. i.e. the line of research is part of the mission of the ROs/RIs, (iii) wide dissemination

of research results on a non-exclusive and non-discriminatory basis. Linked to the former point, it is

the knowledge transfer conducted by ROs/RIs which can be considered as a non-economic activity

only in cases where all profits are reinvested in primary activities. Economic activities include, for

example, renting out equipment or laboratories to undertakings, RDI services or contract research for

industry. As economic activities are subject to State aid rules, there is a need for a clear separation of

accounts between the two. Otherwise, State aid will apply to all activities. Moreover, any direct or

indirect flow of funding from non-economic to economic activities is not allowed.

The new rule of ancillary economic activities (point 20 of the Framework) introduces a strong

element of flexibility and is aimed at stimulating the diversification of activities and better adaptation

to market needs. It applies when economic activities for ROs/IRs are a minor proportion and so do

not involve State aid rules. Specific conditions need to be fulfilled and these were analysed in detail. It

is required that economic activities:

o are directly related to, and necessary for, the operation of the RO/RI or intrinsically linked to RO/RI main non-economic use, i.e. they consume the same inputs as non-economic activities;

o are limited in scope and the capacity allocated is not over 20% of the entity's overall annual capacity. The capacity is linked to the inputs involved (i.e. equipment and staff which should be the same for economic and non-economic activities).

Otherwise, if the 20% ceiling is exceeded there are two available options: using the 'claw back'

mechanism according to which the full cost of economic activities (including pro rata depreciation

costs of the infrastructure) must be covered solely by commercial revenues or asking for an

assessment under State aid rules (e.g. Article 25 and 26 GBER).

There is no economic advantage if the investment complies with the Market Economy Operator

Principle (MEOP). This requires that specific conditions are fulfilled.


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Contract research and research services and collaborative research between ROs/RIs and industry:

The conditions to be fulfilled in order to avoid assessment under standard State aid rules and to avoid indirect

State aid to undertakings were presented with reference to contract research and research services, on the one

hand, and collaborative research between ROs/RIs and industry, on the other (as shown in the table below):

Contract research and research services by ROs/RIs Collaborative research between ROs/RIs and

industry

Assessment of aid at the ROs/RIs level:

No State aid if:

separation of accounts for economic and non-

economic activities,

no cross-subsidisation,

self-sustainability of economic activities => use

of "own resources"

Otherwise => assessment under standard State aid

rules

Assessment of aid at the ROs/RIs level :

No State aid only if:

'independent R&D' (non-economic), or

separation of accounts, no cross-subsidisation

and self-sustainability of economic activities

(use of "own resources")

Otherwise=> assessment under standard State aid

rules

Indirect State aid to undertakings is avoided if:

Research services or contract research sold at

market price, or

if no reliable benchmark for market price:

o full costs + margin as commonly applied in

the sector for the service concerned, or

o arm's length negotiations where ROs/RIs

negotiate to obtain maximum economic

benefit and cover at least their marginal

costs

Indirect State aid to undertakings is avoided if:

undertakings bear the full project costs, or

knowledge is widely disseminated and ROs/RIs

retain the exclusive use of any IPR generated by

them, or

IPRs allocation between public and private

partner is proportional (reflects respective

contributions and interests), or

ROs/RIs receive a ‘compensation equivalent to

market price’ in case of assignment of IPRs to

the private partners

If none of the conditions above is met, the full amount of the contribution is considered as an advantage for

the ROs/RIs and thus the State aid rules apply. If this is the case, it is relevant to identify whether and to what

extent the GBER can avoid notification to the Commission. Three specific aids were considered and presented

as follows:

1) Aid for RDI projects (article 25 GBER)

Identification of three categories subject to higher notification threshold (fundamental research,

industrial research, experimental development);

aid intensities linked to individual categories based on the size of the enterprise (large, medium or

small enterprises);

eligible costs include expenditure for land, buildings, instruments and equipment;

If the above conditions under the GBER are not fulfilled, the project has to be notified to the

European Commission.

2) Aid for RDI Infrastructure

Definition (article 2 (91) GBER and point 15 (ff) RDI Framework);

Conditions for the investment aid for the construction and upgrade of research infrastructure

(Article 26 GBER).

3) Innovation aid

Aid for innovation clusters (article 27 GBER);

Innovation aid for SMEs (article 28 GBER).


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09h15-10h15 Current challenges related to application of State aid in the field of RDI

Phedon Nicolaides (State aid expert – Professor at Maastricht University and College of Europe)

Phedon Nicolaides (PN) introduced the topic of his presentation as the major challenges raised by the new

State aid Regulation, which involve the following:

The need for public funding in RDI compared to the global competition.

The effectiveness of public spending in RDI pointing out the results of three studies: 1) a

counterfactual analysis presented in the Sixth Cohesion Report (July 2014) which showed that public

support increased the amount that companies spent on RDI and employment in RDI activities while

findings are more variable as regards effect on productivity and profits; 2) an analysis on loans

included in the Special report of the Court of Auditors (4/2011); 3) a further report of the Court of

Auditors on the management of the EU budget that pointed out significant irregularities in the

implementation of the Structural Funds in particular in the application of State aid rules and public

procurement (with three main underlying problematic issues - giving money after the projects starts,

giving money to not eligible costs and giving too much money);

Six types of issues encountered by (some) national authorities in implementing state aid rules on RDI.

In particular, he focussed on those issues which in his opinion represented the main challenges for the

implementation of State aid rules and were not covered by the Commission’s FAQ of July 2015. At the same

time, he stressed how some of these had been addressed by PC in the previous presentation:

1) Difficulties in defining some concepts in view of the evolution of case law, e.g. economic vs. non-

economic activities (based on the evolution of cases such as education fees for universities which are

becoming even more market-oriented), ancillary activities (how an activity can be economic and yet

be intrinsically linked to non-economic activities), research categories (it is difficult to draw a precise

line between research categories when different disciplines and sectors use different terms),

collaborative research (how narrow can it be?), research infrastructure.

2) The treatment of “collaboration” with reference to article 25 GBER: how precisely can “effective

collaboration” be defined? How can a clear distinction be made between economic and non-economic

activities which include collaboration?

3) Is there “transfer of state resources” when resources come from revenue generated by own activities

and are committed by the independent decision of the research organisation?

4) What are the relevant costs and the maximum amount of aid allowed? If economic activities exceed

20% the question is what the relevant costs are. As PC pointed out, the investment which is taken into

account is that attributed to the economic activities. In cases where the RO/RI involves the claw-back

mechanism, how will it be implemented?

5) Point 22 of the RDI Framework is not clear when a research organisation acts as intermediary.

6) The issue of pricing of services or access to users. For example a market price for research services

does not normally exist (unlike for other sectors such as consulting services).

PC replied adding further comments linked to some points raised above: 1) the issues raised by the increasing

costs of university fees and of activities which are even more market-oriented; 2) Calculation of the capacity

share; 3) Classification of collaboration as economic vs. non-economic activity.


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10h45-12h15 State aid rules for RDI / Key issues identified by practitioners

Marek Przeor / Yvonne Simon, Directorate-General for Regional and Urban Policy, European Commission

Marek Przeor (MP) and Yvonne Simon (YS) presented and answered a selection of questions raised in advance

by Member States on the application of the new State aid rules. Participants were then asked to raise further

questions.

Questions raised by Member States

Question 1 - State aid rules allow a 100%-financing of non-economic RDI activities. How should economic and

non-economic activities be distinguished?

YS: There are means and guidelines to distinguish economic and non-economic activities. For non-economic

activities, 100% of funding is possible. Nevertheless, it is necessary to clearly separate the two kinds of

activities otherwise the State aid rules apply to both (point 18 RDI Framework). In order to facilitate the

distinction among the two categories:

a list of non-economic activities is included in point 19 of RDI Framework;

the Draft Notion of State aid (Paras 12-27) published on the DE COMP website also contains

guidance, including the main court judgments and decisions. In particular, economic activities are

defined as: “offering goods or services on a market”/“construction of an infrastructure which is

commercially exploited”. After the Leipzig-Halle judgment2 in the EU Court of Justice, the

construction of infrastructure which will be commercially exploited also falls under the ambit of

State aid control.

Question 2: If a public funding supports non-economic activities, how is it possible to ensure that they won’t

support economic activities?

YS: Activities have to be kept clearly separated so that cross-subsidisation of economic activities is effectively

avoided. To make sure of this, separate accounts need to be maintained in line with the principles governing

the Transparency Directive 2006/111/EC (e.g. functional separation).

Question 3: In cases where the planned research in infrastructure will use only a small amount of economic

activities, how to determine if the research infrastructure will stay below the 20%-ancillarity threshold for

economic activities?

YS: The assessment is based on different criteria which all need to be fulfilled. With regard to the means of

determining the capacity of economic activities, the GBER and RDI Framework do not directly provide an

answer in order to give MSs the possibility of answering according to the specific features of the case. In any

case, the means which seem to be most appropriate to determine the capacity share are typically the inputs,

such as the number of working hours, while revenues are less appropriate as also highlighted by the Court of

Auditors. In addition, it is important to make a realistic and reasonable prognosis when planning the project in

order to avoid the possibility of any future assessment putting into question the application of the ancillary

clause.

Question 4: How can State aid in technology transfers be avoided?

YS: There is an issue of State aid for technology transfer when a public entity is involved or when the

technology which is subject of the transfer has been developed with public resources. State aid can be involved

if the transfer is not adequately remunerated. In order to avoid this, adequate remuneration should be ensured

through the payment of market prices. Useful information to establish the market price is provided in the Draft

Notion of Aid Notice.

2 European Court of Justice (ECJ) judgement in Case C-288/11 P ("Leipzig Halle") of 19 December 2012.


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In the case of RDI cooperation, the contribution to the joint research may be sufficient for receiving rights to

use the developed technology. It is in any event advisable that cooperation contracts/agreements explicitly

mention the remuneration for the (potential) transfer of technology.

Question 5: The block exemption cannot be applied to sectorial schemes. Can a specific scheme fit under the

GBER even if it is targeted at only a few sectors?

YS: This sectorial restriction applies only to the regional aid section of the GBER and not to the RDI GBER

section. Some further considerations which apply to regional aid:

a scheme is considered sectorial only if it applies to less than 5 classes of NUTS2 regions;

Ad-hoc aid is possible under the regional aid section;

State aid notifications can allow for sectorial schemes under the RAG 2014-2020.

MP: This point is relevant also for smart specialisation.

Question 6: Is the requirement for a contribution of at least 10% in Article 26(4) GBER meant to be “per

undertaking” of can be done by several undertakings together? Can contribution be in the form of land and

buildings qualify as contribution?

YS: Article 26(4) GBER refers to investment aid for research infrastructure. The access to research

infrastructure is open to several users, but undertakings which have financed at least 10% may have access to

more favourable conditions. In any case, the 10% of contribution applies “per undertaking”. Contributions in

the form of land and buildings can qualify for achieving the 10% participation.

As information, the same question was raised and answered in an online forum which was created a year ago

by the State aid Service of DG COMP (ECN-ET, now called eState aid WIKI). The eState aid WIKI allows national

authorities to submit questions to and receive answers from DG COMP. This represents a useful tool for

increasing transparency on the interpretation of State aid rules. A list of national authorities which already

have access to this service is included in the material circulated for the seminar. In February, the system will

become more user-friendly and the access to it will be extended to more authorities.

Question 7: In Article 28 GBER the definition of “innovation advisory services” does not require that services are

related to an “innovative” technology transfer. Is it therefore sufficient to verify that the services are related to

a technology transfer?

YS: There is a need to remain under the scope of the GBER, i.e. the support is defined as innovation aid for

SMEs as included in article 28 GBER.

Therefore, innovation advisory services related to a technology transfer require that the technology transfer

involves an innovation for the benefiting company. The advisory services as such do not need to be innovative.

Question 8: In cases of combination of resources from Horizon 2020 and ERDF, what does this mean for the

calculation of the GBER notification threshold and aid intensities?

YS: A distinction should be made between the two kinds of funding: Horizon 2020 resources are centrally

managed by the EU and as such do not qualify as ‘State aid’ in the meaning of Article 107(1) TFEU, while ERDF

resources are State resources as MSs decide their use and as such can qualify as ‘State aid’. Hence, when the

two are combined, only ERDF (plus any other national public funding) is taken into account for calculating

notification thresholds or maximum aid intensities. In cases where State aid rules require own contributions

from the aid recipient, Horizon 2020 resources do not count as own resources.

Question 9: Are there inconsistences between State aid rules and Cohesion policy rules?

YS: Cohesion policy rules and State aid rules are two set of rules which apply in parallel. They have different

objectives and therefore there can be differences between their scope and the terminology used. For example,

Cohesion policy has limited the support to large enterprises in the 2014-2020 period, while many State aid

rules allow for State aid to large undertakings.


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Question 10: How to ensure legal certainty for the project in order to have it compliant with State aid rules?

YS: MSs have flexibility in setting up projects/schemes, the Commission services cannot replace MS choices.

Nevertheless, different solutions have been established at national level to discuss and verify State aid

compliance such as the State aid contact points in national administrations and the use of Technical Assistance

to obtain expert advice. At the European level, the MS may contact DG COMP for pre-notification talks.

Moreover, a key focus of Cohesion policy in 2014-2020 is on increasing national administrative capacity in

relation to State aid.

Questions from the audience

1) Are there specific systems of accreditation of research organisation and research infrastructures at the

national level?

PC: Article 2(83) GBER contains a definition of research organisations, but the accreditation procedure

of ROs and RIs is made internally by MSs on the basis of national legislation. Hence, neither the GBER

nor the RDI Framework interferes with systems of accreditation in place at the national level.

2) A concrete example was presented asking whether the set-up of a public entity aimed at promoting

innovative entrepreneurship (e.g. setting innovative activities, supporting to find alternative financial

solutions and apply the State aid legislation, disseminating the results of research, etc.), as well as

supporting MAs in the implementation of the innovation policy will be subject to State aid rules.

PC: It is necessary to define first the kind of entity and its primary activities. From the description, it

seems that it involves economic activities so it would fall under the State aid regulation. However, if

conditions are fulfilled it will be a compatible aid.

3) When is collaborative research considered as economic activity? Could a concrete example be

presented?

PC: First, conditions have to be fulfilled cumulatively (such as separation of accounts, no cross-

subsidisation and self-sustainability). They are considered as pre-conditions, in the sense that they

need to be in place.

Then, it has to be verified whether the research is independent, i.e. if the topic of the research is fully

in line with the institutional mission of the ROs/RIs. In this case, it can be considered as a non-

economic activity. However, when collaboration is set up between a RO/RI and an industry, one or

more undertakings can often influence the research. Hence it becomes an economic activity and will

be subject to State aid rules. An example provided is the research in new materials. In this case, the

influence of private partner(s) is strong and linked to the determination of research goals, thus the

activity in this case is defined as economic.

4) Is the separation of accounts always necessary even if non-economic activities are provided or they

are minimal?

YS: There is no need for separation if no economic activities are provided, while it becomes necessary

when even minimal economic activities are present.

5) For how long does the capacity share need to be monitored and what happens in cases where it is

under 20% in the first year and rises to 21% in the following one?

SY/PC: The system is quite flexible and the MS can decide how to better define the capacity according

to those which are considered the most suitable means for the project to be implemented. In case

there is a risk that the capacity may rise over the years and exceed the 20%-ancillarity, it is useful to

have established in advance a claw-back mechanism.

The period taken into consideration is each individual year (annual capacity). Hence, the 20% clause

applies to each year separately. If one year the threshold of 20% is exceeded, the ancillarity is not


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applicable any longer and the economic activities become subject to State aid rules. In this case, the

claw-back mechanism applies.

6) When will the draft on Notion of Aid Notice be adopted?

PC: The process is ongoing.

7) Is there inconsistency between Cohesion policy and State aid rules, e.g. on flat taxes?

PC: As a general rule, when there are different rules all need to be complied with and when rules are

similar, compliance is with the strictest one. In detail on flat rates, it has to be bear in mind that

eligible costs need to be directly attributed to a project. The percentage needs to be representative of

what the actual costs are (approximation can be used).

8) With regard to the threshold of 20% of economic activities, could it be advisable to have a different

threshold for big research organisations, e.g. Fraunhofer or Max Planck Institute? Is the annual

assessment of the 20% threshold advisable also for big infrastructure projects given the fluctuation of

economic activities over time?

PC: On the first question, it might be useful to have a modulation according to the size of the

organisation in particular for those which incorporate several institutes. In any case, this is not

allowed under the current legislation. As a general rule, it is not relevant to look at the profile of the

organisation to define the capacity, but rather at the minimum administrative units which over time

use common inputs for both economic and non-economic activities. This minimises the risk of bias in

relation to the different activities of different organisations.

On the second question, it is recommended to look at the annual capacity even for big infrastructure

projects on the basis of two main considerations: the distinction between economic and non-

economic activities has to be included in the annual financial statement; if there is a risk that the

claw-back mechanism does not allow recovery of the full amount of public resources devoted to the

economic activities, it is better to discuss this with the Commission as soon as possible (and certainly

not at the end of the project).

13h15-15h15 Parallel working groups

The afternoon session was organised into three parallel working groups dealing with three different case studies on three themes.

A. RDI infrastructure

Chair: Paolo Cesarini (DG COMP); Rapporteur: Kamil Dörfler (DG REGIO)

• A single project concerning "investment in construction of research infrastructure" (new construction or extension of existing research facility);

• Beneficiary (applicant): research and science institution;

• The application indicates that the non-economic activities carried out in the newly/ reconstructed facility will represent X% of the total capacity of the facility.

B. RDI collaboration

Chair: Stefana Cholakova (DG COMP); Rapporteur: Marek Przeor (DG REGIO)

• A single project concerning "joint research and business projects" ;

• Beneficiary (applicant): science and study institutions;

• Mandatory partners: private business entities;


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• Scope: support to projects on research and development (R&D) activities implemented by the applicants in effective collaboration with partners;

C. Innovations/SMEs

Chair: Vanessa Bruynooghe (DG COMP); Rapporteur: Katja Reppel (DG REGIO)

• A programme measure dedicated to promote innovations through the establishment of full scale testing and demonstration facilities.

• Beneficiaries (applicants): non-profit organisations

• Target group: enterprises, particularly small and medium-sized enterprises (SMEs)

• Scope: supported areas are climate, environment and energy technologies ("Green Labs")

The discussion focused on three key questions:

1. Is it State aid? If not, how to justify?

2. Can it be classified under GBER (no notification)? Yes/No: Please, justify.

3. If you need to notify your measure/state aid scheme to the EC, what legal framework would you follow and what requirements/assessment are needed?

Participants were asked to choose in advance two themes and groups rotated after 45 minutes allowing each participant to be involved in two working groups.

15h45-16h30 Reporting from the working groups

PB introduced the last session of the seminar which summarised the results from the working groups. He presented this as a good exercise not only for the participants, but also for the Commission as it helped them understand what the main issues/challenges to be addressed are. He introduced the three rapporteurs of each working group from DG REGIO, Kamil Dörfler, Marek Przeor and Katja Reppel.

A. RDI infrastructure

Kamil Dörfler (KD) summarised the main points raised in the working group on RDI Infrastructure. The questions raised by the participants were interesting and enabled the main challenges of the case presented to be investigated. The points below contain the questions raised (Q) and the recommendations given (R):

- Q: Can be the project funded 100% without being subject to State aid rules?

R: It is recommended to start with a clarification of the status of the RDI organisation (applicant/beneficiary) and its eligibility. A clear classification of the scope of the envisaged activities is necessary, whether they are of economic or non-economic nature (to what extent are economic activities linked to non-economic activities and are economic activities below the 20%-threshold?). To answer that a complete and in-depth analysis of cost accountancy is required using "activity based costing" (ABC) methodology. The business plan has to be carefully assessed (in particular whether a realistic and reasonable prognosis is provided).

If there is no certainty that the 20% threshold is met, then, the grant-giving body (in this case the MA) should negotiate the claw-back mechanism either considering the possibility for the applicant to pay back the full grant in cases where the supported activities turn out to be economic (worst scenario) or to partially return that part of the funding which went to the economic activities.

- Q: Given that the model case involves State aid rules, does the GBER cover it? Are the GBER criteria fulfilled?

R: It was made clear that all criteria foreseen by the GBER need to be fulfilled. As clarification, it is not the total project cost that need to be taken into account to assess whether the application is under the GBER or not, but only the percentage of the cost related to the economic activities.


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B. RDI collaboration

Marek Przeor (MP) summarised the main points raised in the working group on RDI collaboration. The model case presented included an effective collaboration (as defined by Article 26 RDI Framework) between a university and enterprises in the non-economic activities area. Theoretically, the situation is not subject to State aid rules, but some conditions need to be verified as summarised below:

Check that there are no indirect aids for SMEs as defined by Article 28 RDI Framework.

If the research result is sold to the enterprise(s), this has to be done according to market price (if the compensation is in kind an independent evaluator needs to assess the implicit value);

It is important that there is a priori agreement between those involved to clearly define what the sharing of financing, inputs, eligible costs and outputs is.

Further questions raised on specific topics were the following:

1) In cases where the research organisation receives revenue from selling the research result, do they need to reinvest them in the research organisation in order to avoid State aid being involved?

2) In cases where SMEs are beneficiaries, how are the different levels of support calculated according to the different size of enterprises?

3) How is the market price for the research arrived at?

C. Innovation/SMEs

Katja Reppel (KR) summarised the main points raised in the working group on Innovation/SMEs. The model

case presented involved innovation in SMEs which is particularly relevant for Cohesion policy in the 2014-2020

period. The choice of the model case took into consideration two main types of support to SMEs: direct

support to SMEs and the support for setting up facilities (including equipment infrastructure, etc.) for

demonstrating and testing new products. The support is targeted to SMEs, but it is opened also to large

enterprises which are involved in eco-innovation. The projects are funded half by the State and half by the

private sector. The discussion took place in various steps based on questions raised by the Chair (Q),

summarised as follows:

Q - What is the best definition of the facility according to the GBER?

Two articles of the GBER were referred to: article 27 - innovation cluster (used in the past) and article

26 - investment aid for research innovation in infrastructure (new provisions).

Q - As the SMEs participating in the project will be asked to pay market price in any case, what is the

rationale (i.e. what is the market gap that the intervention is intended seeks to correct) to support

these kinds of facility?

Generally, aid for R&D infrastructure, as well as for innovation cluster facilities, addresses a market

failure stemming from coordination difficulties which hamper the construction and upgrade of such

infrastructure and development of clusters. Depending on the specific area in which the support is

provided, i.e. eco-innovation and energy efficiency, this market failure can be combined with other

market failures which are policy areas of major interest for Cohesion policy. The establishment of a

facility of this type in a specific region and the proximity of SMEs to it may be one of the justifications

for the intervention.

Q - If SMEs have to contribute to half of the costs in order to set-up the facility and then pay the market

price, what is the advantage for them to participate in such kinds of project?

Where the facility is used for economic activity, it is correct that the maximum aid intensity is set at

50%. The advantage stemming from the ownership of the infrastructure in such a situation is naturally

not only own use, but to rent it out at market price to other users.

It was suggested to introduce forms of support to SMEs to create an advantage for them. For example,

the support can facilitate their access to the facility, e.g. offering SMEs some discount to use it or

putting them as first in line if there is a limited access to the facility. This is possible, but the support to


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set up the facility and any direct support to SMEs need to be separate according to the new

Regulation, i.e. two schemes or two sections in the same scheme have to be designed. In this case,

various articles of the GBER could potentially apply to define the support to the SMEs: Article 22 (start-

up aid), Article 25 (research and innovation project) and Article 28 (SMEs innovation aid), in particular

paragraph 28.2 covers aid to SMEs for innovation support services such as renting a laboratory. If

there is a form of "discount" planned for the SMEs, this should be separated from the support to the

facility and handled as direct aid to the SME.

Q - If large enterprises use the facility, they are not covered by article 28 (as it covers only SME aid);

what rules apply?

Large enterprises can apply on the basis of de minimis. Nevertheless, as different rules apply to State

aid and to regional aid for large enterprises, there is a need to verify whether the Operational

programme (i.e. the specific objectives of the priority axes) allows support to large enterprises.

Q - Can the support be limited only to those SMEs established on a specific territory?

Direct aid to the users of an R&D infrastructure or cluster facility (e.g. through grants or vouchers

covering the user's fee or part thereof) can be limited to certain beneficiaries, such as SMEs within a

certain region or MS. See in this respect GBER art 1.5(a), which allows the requirement of having an

establishment in the member state concerned. This is particularly evident under the ERDF rules where

regional OPs cover specific territories. However, please keep in mind that, although the direct support

to the users can be limited to certain beneficiaries, if aid is granted for the construction of the

infrastructure, the access to the infrastructure must be open to several users and be granted on a

transparent and non-discriminatory basis.

Further Questions raised from the audience:

1) Article 27(2) GBER provides that fee charges to use the cluster facility should correspond to the market

price or reflect the costs. Article 26 GBER is similar, but it provides that fee charges should correspond

to the market price, but costs are not mentioned. Why?

PC: It is the same rule for both, based on market price.

2) What about the fulfilment of incentive effects in case of seal of excellence? What happens if a project

which is awarded with the seal of excellence has already started? Can it still be funded by the ERDF?

KR/PC: According to the GBER, it is presumed that there is an incentive effect if the project has not

started at the moment of the application for public support. The question in the case of seal of

excellence is to define the right “moment”, i.e. when the application is made, i.e. to H2020 or after the

seal of excellence is awarded and the application is presented to the national funding body.. It is

suggested to adopt a prudent approach since a question over a project, which has already started,

actually needing support can easily be raised, thus the incentive effect is presumed to exist if the

project has not started yet by the time the Seal of Excellence is presented to the national funding

body..

3) Do the projects covered by the GBER need to be registered or communicated to the Commission?

PC: It is a requirement also to communicate projects covered by the GBER to the Commission through

an online application. Different forms are available for non-notifiable aids under GBER and notifiable

ones (or pre-notifiable ones). All of these are on a platform managed by DG COMP.

4) Is it possible to produce Guides which summarise the procedures of State aid to RDI, presenting

concrete cases and answers, as support for national authorities?

PB/PC: A number of different initiatives have already been taken to help MSs i to apply the new State

aid rules correctly, such as:


12 / 12

As part of the State Aid Action Plan, country seminars were organised in 2015 (see above) and

further thematic seminars – this on RDI is the first one - will be organised in 2016.

A study which will provide a picture of how State aids are operated across MSs is under

preparation.

It does not seem feasible to provide common Guides at the European level as there are

extreme differences across MSs on the application of State aid rules. Hence, it is advisable

that Guides are provided at the national level as some countries have already done, such as

the UK and France These can be used as examples by other countries.

DG REGIO is preparing an information note intended to be an overview on the possibilities

available for SMEs under the ERDF as regards the seal of excellence and H2020.

Different tools are also made available by DG COMP such as:

a number of explanatory notes on the State aid regulation published on the DG COMP

website;

the creation of an interactive platform with questions/replies on State aid rules.

It might be useful to prepare a flowchart or a decision tree per type of state aid in different areas in

order to summarise the main steps of the application assessment (i.e. including the main questions to

be answered).

In case all these tools available at the European level are not enough to solve specific cases, there is

the possibility of asking for external consultancy or technical assistance.

16h30-16h45 Conclusions and closure

Pascal Boijmans, Head of Unit, Directorate-General for Regional and Urban Policy, Commission

The seminar was an occasion to answer the most frequent questions raised by MSs with a focus on concrete

cases. It was intended as a further means of support beyond the normal channels already available. The

comments raised by the audience will be considered and discussed internally.

A further initiative of DG REGIO, Peer 2 Peer, gives the possibility of peer-to-peer exchanges between

managing, certifying and audit authorities in Member States.

PB informed the meeting that the list of participants (with email addresses) would be circulated and that all

seminar documents – presentation and background papers – were already available on the seminar webpage.

He also invited participants to provide feedback on the seminar by replying to an online evaluation.


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