Subsidy Law

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Complex rules on state subsidies

The public sector provides subsidies in the form of grants, but also by means of low interest loans, guarantees, sureties and reduced prices when purchasing public property, etc. Providers and recipients of subsidies alike must comply with strict legal requirements to avoid the support being called into question. Key elements here include European state aid law, national budget laws and, for bidders, procurement law, with which they are generally required to comply when using the funds.

We advise both providers and recipients of subsidies

Our experts on subsidy law advise providers of subsidies when granting and monitoring the use of such funds, as well as recipients when applying for and using subsidies. This includes supporting them when subsidy providers carry out checks. We also advise on transactions in order to ensure that the transaction does not lead to loss of the subsidy or a subsequent request for repayment.

Where subsidies have been granted unlawfully or other issues arise, we advise both the public sector and the recipient of the subsidy in negotiations with the provider or during revocation or return proceedings, and also during any subsequent court proceedings.

Our subsidy law activities include:

  • Legal opinions on the lawfulness and lawful structuring of subsidies
  • Advice when applying for subsidies
  • Ensuring that transactions, privatisations and PPPs meet legal requirements
  • Compliance
  • Negotiations ahead of a demand to return subsidies
  • Representation in administrative proceedings and before the courts

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12/03/2024
Multi-billion incentive programme for climate-friendly industry launched:...
Berlin – The German government is aiming to make German industry carbon-neutral by 2045. In line with this commitment, on Tuesday, 12 March 2024 the Federal Ministry for Economic Affairs and Climate Action launched the world’s first bidding process for a programme to fund climate action contracts. Based on carbon contracts for difference, these climate action contracts promote investment in climate-friendly production facilities that would not otherwise be economically viable at this point in time. The programme is primarily aimed at operators of emis­sion-in­tens­ive plants, such as in the steel, paper, chemicals, metal and glass industries. Climate action contracts provide an incentive to develop and build the required technologies and infrastructure in Germany now. This will not only avoid around 350 million tonnes of CO2 over the term of the funding programme up to 2045, but is also designed to kick-start the urgently needed market transformation while simultaneously setting new international standards for efficient, low-bureaucracy support. The climate action contracts are intended as both a key tool for climate change mitigation and to strengthen Germany as a country with a long history of industry and innovation. EUR 4 billion has been made available over a 15-year term for the initial bidding process that has now been opened. Companies that were successful in the preparatory phase in the summer of 2023 can apply to take part in the initial bidding process within the next four months. As Germany’s economics minister announced at today’s press conference, the second round of bidding will be conducted later in 2024, with EUR 19 billion available for this purpose. Two further rounds of bidding are scheduled for 2025.A CMS team headed by lead partner Dr Jürgen Frodermann advised the Federal Ministry for Economic Affairs and Climate Action on all aspects of subsidy, state aid, contract and energy law with regard to the support programme. The advice related in particular to drafting a funding policy and associated climate action contracts to be concluded between the state and companies eligible for funding. The work also included support around the notification procedure to the European Commission. In view of the pioneering nature of the funding programme, the CMS team had to deal with legal issues arising in connection with the programme in both a European and a national context, while also ensuring close alignment with the defined technical and economic objectives. The support was provided through an in­ter­dis­cip­lin­ary consortium headed by lead project manager Jülich, together with VDI/VDE Innovation + Technik and Deloitte. CMS Germany Dr Jürgen Frodermann, Lead Partner Dr Nico Hannemann, Senior Associate Dr Nora Zabel, Counsel Björn Hopen, Associate Nina Becker, Associate, all Contract Law Shaghayegh Smousavi, Partner, Energy / Regulation Dr Jakob Steiff, Partner Dr André Lippert, Partner Dr Sven Brockhoff, Counsel Dr Annchristin Streuber, As­so­ci­ate Con­stan­ze Schweidtmann, Associate, all Public Law / Subsidy Law Dr Michael Bauer, Partner Louisa Thomasberger, Associate, both State Aid Dr Martin Friedberg, Partner, TaxPress Con­tact presse@cms-hs. com
12/03/2024
After EU Commission's first decision on Carbon Contracts for Difference,...
The European Commission approved the first Carbon Contracts for Difference (CCfD) scheme under the new Guidelines on State aid for climate, environmental protection and energy 2022 (CEEAG).Fol­low­ing the...
05/03/2024
European Commission authorises EUR 550 million Italian hydrogen aid scheme
On 30 January 2024, the European Commission authorised an Italian hydrogen aid scheme with a budget of EUR 550 million under the Temporary Crisis and Transition Framework.The Green Deal industrial planThe...
22/01/2024
State aid: The European Commission approves an Italian aid scheme for the...
On 15 January 2024, the European Commission approved a EUR 120 mil­lion Italian aid scheme for all airlines establishing new connections between one of the three airports in Calabria, namely Tito Minniti...
27/11/2023
State aid: Temporary Crisis and Transition Framework extended
The European Commission has adjusted the timetable for phasing out the provisions of the State aid Temporary Crisis and Transition Framework after sending Member States this proposal for partial adjustment...
18/10/2023
State aid: The Court of Justice of the EU annuls the judgment of the General...
The European Commission's decision of 31 July 2017  On 7 April 2017, Germany notified the Commission of its plan to grant operating aid to Frankfurt-Hahn airport to cover the deficit of its operator...
10/07/2023
In-depth investigation by the European Commission into Danish and Swedish...
In August 2020, Denmark and Sweden notified the European Commission of their plans to provide support in the form of recapitalisation measures for the airline SAS.As a result of pandemic-related travel...
26/06/2023
Revised guidance on the application of EU State aid rules in the UK post-Brexit
On 9 June 2023, the European Commission (“EC”) adopted a revised Notice on the application of the EU State aid rules to the UK following the end of the Brexit transition period.  On the same day...
01/06/2023
State aid: following appeals by Ryanair, the General Court of the EU annuls...
On 11 May 2023, the General Court of the EU cancelled two European Commission decisions authorizing State aid in the form of capital injections for the airlines SAS and Deutsche Lufthansa, in particular...
18/05/2023
European Commission's public consultation on the extension of operating...
The European Commission has recently submitted for public consultation its draft communication extending the transitional period for operating aid that can be granted to regional airports under the 2014...
13/04/2023
State aid: Italian EUR 400 million loan for Alitalia qualified by the European...
On 27 March 2023, the European Commission concluded that an Italian loan of EUR 400 million granted in 2019 in favour of Alitalia constituted illegal and incompatible aid that has to be reimbursed. Alitalia...
15/03/2023
State aid: revision of GBER and Temporary Crisis Framework to encourage...
On 9 March 2023, the European Commission approved revisions to the General Block Exemption Regulation (GBER) and the Temporary Crisis Framework with the aim of enabling Member States to provide the necessary...