Commission adopts revised State aid rules on IPCEIs

30 Nov 2021

The revised IPCEI Communication will apply from 1 January 2022. Indeed the EC has adopted a revised Communication on State aid rules for Important Projects of Common European Interest (‘IPCEI Communication’).

What is an IPCEI?

“Important Projects of Common European Interest“ (IPCEI) is a key strategic instrument with regard to the implementation of the European Union Industrial Strategy. An IPCEI brings together knowledge, expertise, financial resources and economic actors throughout the Union, as to overcome important market or systemic failures and societal challenges which could not otherwise be addressed. IPCEI are large-scale European consortia in key strategic value chains featuring tightly connected company projects. IPCEI features projects with a dedicated focus on Research and Development as well as First Industrial Deployment (FID).

An IPCEI requires the approval of the European Commission under state aid law. With their approval, the European Commission ensures that all EU Member States can benefit, that there is no  disproportionate distortion of competition and that companies within their projects adhere to the IPCEI criteria as laid down in the initial IPCEI communication of 2014.

First IPCEI on Microelectronics

3 EU member states (France, Germany, Italy and the United Kingdom, followed by Austria in 2021 have joined forces to strengthen key areas of the European Microelectronics Industry.

The first IPCEI on Microelectronics brings together the entire wide-ranging family of microelectronics topics: e.g. optics development, hardware design, process knowledge, production facilities, chip manufacture and downstream applications in a wide variety of industries. 32 European companies/RTOs are directly involved in the first IPCEI on Microelectronics. In the course of the project, these companies will cooperate with up to 425 additional (indirect) partners.

More on IPCEI on Microlectronics here and the concerned Technology Fields here.

IPCEI II on Micoelectronics

While several governments in major chip producing regions across the globe are pressing ahead with significant incentive programmes to tweak semiconductors supply in their favour – in the United States of America, $ 52 billion are discussed to “restore semiconductor manufacturing back to American soil”, and $ 65 billion are provided by the government of South Korea to safeguard their position within the semiconductor ecosystem– it is urgent to speed up RD&I projects and the first industrial deployments for a competitive, sovereign and resilient EU industry.

A new project of Common European Interest in microelectronics -IPCEI- with a focus on processors and connectivity, is being set up to strengthen capabilities in design and increase autonomy and resilience of EU semiconductor value chains.

As early as February 2021, Altmaier, Federal Minister for Economic Affairs and Energy and Le Maire French Minister for the Economy, Finance and Recovery, confirmed their active engagement in the launch of  new IPCEIs on microelectronics, because of the the global shortage of electronic components for the car industry which illustrated once more the need for an ambitious IPCEI to strengthen Europe’s capabilities. Altmaier reaffirmed his engagement in his live statement on 1 September 2021 with a key focus on Safety, Security, Sustainability and Sovereignty and an announced investment of around €3 billion to reclaim production sites along the entire value chain of semiconductor production.

What is new in states aid rules for IPCEI?

The revised IPCEI Communication has been set up to “further enhance the openness of IPCEIs and facilitate the participation of small and medium-sized enterprises.” as outlined by Margrethe Vestager, EC Executive Vice-President on 25 November 2021.

It includes a number of targeted adjustments:

  • Further enhances the European and open character of IPCEIs: all Member States should be informed of the possible emergence of the IPCEIs, and begiven the opportunity to participate if interested. The project must  involve at least 4 Member States and its benefits must not be confined to the financing Member States, but extend to a wider part of the Union.
  • Facilitates the participation of small and medium sized enterprises (SMEs) in IPCEIs: the revised IPCEI communication enhances the benefits of their involvement, through specific facilitations for the assessment of the compatibility of the aid to SMEs, such as the possibility for smaller companies to have a more limited own contribution to the projects than otherwise required. The revised Communication also encourages collaborations between larger companies participating in an IPCEI and SMEs.
  • Aligns its objectives with the current EU priorities: the project must represent a concrete, clear and identifiable important contribution to the Union’s objectives or strategies and must have a significant impact on sustainable growth, for example by being of major importance for the European Green Deal and others strategies. The revised IPCEI Communication also clarifies the criteria for the combination of EU and national funds.

Read the full communication from the Commission, Criteria for the analysis of the compatibility with the internal market of State aid to promote the execution of important projects of common European interest’ here.