New rules for R&D in EU

The new framework, part of the Commission’s ongoing State Aid Modernisation initiative, consists of two complementary parts:

• A revised General Block Exemption Regulation (GBER), setting out the conditions under which R&D&I-aid (among other types of state aid) is exempt from the obligation of prior notification to the Commission ('block-exempted').
  
• A new Framework for State aid for research, development and innovation (R&D&I Framework) setting out the conditions under which Member States can grant state aid to companies to carry out R&D&I activities.
  

In essence, the new rules aim to:

• Increase (double on average) the thresholds up to which aid can be granted without prior Commission scrutiny. Moreover the scope of aid measures for R&D&I projects that can be exempted from notification under the GBER has also been widened. It now extends to pilot projects and prototypes, innovation clusters and aid for process and organisational innovation.
  
• Increase the percentage of the costs of the project up to which state aid can be granted. The R&D&I Framework will, for individually notified measures, allow aid up to 70% of eligible costs for large companies and 90% for small companies doing applied research, including the costs of prototyping and demonstration.
  

Impact:

The European Court of Justice is extremely strict when it comes to the provision of state aid a sit can impact on the internal market. The new framework represents a positive development as it extends possibilities to grant state aid without prior notification to the Commission, therefore it reduces administrative burden for companies and allows quicker deployment of aid for beneficiaries.

Moreover, under the old rules pilot projects and prototypes, innovation clusters and aid for process and organisational innovation could not be exempted from the notification procedure, but now can be exempted under the new rules.

The new rules also increase the permissible aid levels. This will reduce the 'financing gap' of R&D-investments (i.e. the part of the project that cannot get private funding).

More information on thresholds and aid levels can be found here.