State aid: Commission approves 2022-2027 regional aid map for Northern Ireland

(Source: European Commission)

The European Commission has approved under EU State aid rules and in line with the Protocol on Ireland/Northern Ireland annexed to the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (‘Withdrawal Agreement’), Northern Ireland’s map for granting regional aid from 1 January 2022 to 31 December 2027, within the framework of the revised Regional aid Guidelines (‘RAG’).

The revised RAG, adopted by the Commission on 19 April 2021 and in force since 1 January 2022, enable support to the least favoured regions in catching up and to reduce disparities in terms of economic well-being, income and unemployment – cohesion objectives that underpin the Single Market. They also provide increased possibilities for supporting regions facing transition or structural challenges such as depopulation, to contribute fully to the green and digital transitions.

At the same time, the revised RAG maintain strong safeguards to prevent the use of public money from triggering the relocation of jobs across the EU’s Single Market, which is essential for fair competition.

Following the UK’s departure from the EU, the revised RAG apply also to Northern Ireland, pursuant to the Protocol on Ireland/Northern Ireland.

Northern Ireland’s regional aid map defines the regions eligible for regional investment aid. The map also establishes the maximum aid intensities in that eligible region. The aid intensity is the maximum amount of State aid that can be granted per beneficiary, expressed as a percentage of eligible investment costs.

Under the revised RAG, regions covering the entire population of Northern Ireland will be eligible for regional investment aid, under the derogation of Article 107(3)(c) of the Treaty on the Functioning of the European Union (‘TFEU’) (so-called ‘c’ areas).

The maximum aid intensity for large enterprises varies depending on the GDP per capita. In Belfast, a 10% maximum aid intensity will apply, while in the rest of the territory of Northern Ireland, the maximum aid intensity will be of 15%. That maximum aid intensity can be increased by 10 percentage points for investments made by medium-sized enterprises and by 20 percentage points for investments made by small enterprises, for their initial investments with eligible costs up to €50 million.

Background

Europe has always been characterised by significant regional disparities in terms of economic well-being, income and unemployment. Regional aid aims to support economic development in disadvantaged areas of Europe, while ensuring a level playing field between Member States.

In the RAG, the Commission sets out the conditions under which regional aid may be considered to be compatible with the internal market and establishes the criteria for identifying the areas that fulfil the conditions of Article 107(3)(a) and (c) of the TFEU (‘a’ and ‘c’ areas respectively). Annexes to the Guidelines identify the most disadvantaged regions, so-called ‘a’ areas, which include the outermost regions and regions whose GDP per capita is below or equal to 75% of the EU average, and the pre-defined ‘c’ areas, representing former ‘a’ areas and sparsely populated areas.

Member States can designate the so-called non-predefined ‘c’ areas, up to a maximum pre-defined ‘c’ coverage (for which figures are also available in Annexes I and II to the Guidelines) and in line with certain criteria. Member States need to notify their proposal for regional aid maps to the Commission for approval. In line with the Withdrawal Agreement and the Protocol on Ireland and Northern Ireland, this also applies to the United Kingdom in respect of Northern Ireland.

In particular, since 1 February 2020, the United Kingdom has withdrawn from the European Union. The Withdrawal Agreement provided for a transition period which ended on 31 December 2020. Since the end of the transition period, the Protocol on Ireland/Northern Ireland applies. The Protocol on Ireland/Northern Ireland is a solution found which avoids a hard border between Ireland/Northern Ireland, safeguarding the Good Friday (Belfast) Agreement and ensuring the integrity of the EU’s Single Market for goods. In line with the Protocol on Ireland/Northern Ireland, a limited set of EU rules related to the Single Market for goods and the Customs Union apply in the United Kingdom in respect of Northern Ireland, including also State aid rules, applicable to and in the United Kingdom, in respect of measures that affect trade between Northern Ireland and the EU. In this context, the Protocol also foresees that the Commission is responsible for their enforcement and hence for approving the regional aid map in Northern Ireland.

The non-confidential version of today’s decision will be made available under the case number SA.101066 (in the State Aid Register) on the DG Competition website. New publications of state aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.

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