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Trends in State Aid Allocation for Environmental and Energy Objectives

Trends in State Aid Allocation for Environmental and Energy Objectives

On 15 January, the European Commission publishes its State Aid Scoreboard in accordance with the annual publication requirement laid down in Commission Regulation (EC) No 794/2004. The Scoreboard provides an overview of Member States’ expenditure on state aid.

Achieving climate objectives requires substantial investment, mobilising both private and public resources. In this context, EU competition policy — and in particular state aid rules — plays a crucial role in supporting a clean, cost-effective and fair transition, while preserving a level playing field within the internal market.

Between 2014 and 2020, state aid for environmental protection and energy savings recorded steady growth. However, the pace of growth gradually slowed over time. Following an increase of 29% in 2015 compared with 2014, growth peaked at 35% in 2016, before easing to 8% in 2017, 7% in 2018 and just 3% in 2019. In 2020, expenditure stabilised at EUR 95.81 billion, the highest level recorded to date. In 2021, a slight decline to EUR 93.12 billion (-3%) was observed.

In 2022, a significant decrease in state aid for environmental and energy objectives was recorded, with expenditure falling to EUR 51.50 billion (-45%). This decline was mainly attributable to a reduction in notified aid expenditure, as Member States reallocate resources to address the ongoing COVID-19 pandemic and prioritise immediate economic recovery over environmental objectives.

In 2023 and 2024, state aid expenditure showed a strong recovery. Notified aid increases, with total state aid amounting to EUR 64.26 billion in 2023 (+25% compared with the previous year, of which EUR 43.02 billion related to notified measures) and EUR 68.82 billion in 2024 (+7% compared with 2023, of which EUR 49.76 billion related to notified measures).

Among the Member States with the highest relative expenditure on environmental and energy projects (as a share of national GDP) in 2024 were Germany (0.71% of GDP) and the Czech Republic (0.59%). A substantial share of the aid expenditure for this purpose in both countries — 85% in Germany and 77% in the Czech Republic — stemmed from notified measures.

Bulgaria, Cyprus and Malta were the Member States with the lowest expenditure on environmental and energy objectives relative to GDP, with total expenditure ranging between 0.06% and 0.09% of national GDP in 2024. A significant gap existed between the highest- and lowest-spending Member States, as illustrated by the example of Bulgaria, whose expenditure was 0.65 percentage points lower than that of Germany, the highest-spending Member State.

Decarbonisation versus energy production: shift in focus

A clear distinction should be made between aid aimed at decarbonisation objectives, including energy efficiency, and aid directed towards energy generation and energy infrastructure.

Aid targeting decarbonisation objectives refers to support specifically designed to reduce greenhouse gas emissions and to promote cleaner and more sustainable energy systems. Its primary purpose is to contribute to emissions reductions and to achieve long-term sustainability.

With regard to state aid aimed at energy generation, examples include support for the deployment of renewable energy sources and for the modernisation of energy infrastructure.

While between 2014 and 2021 decarbonisation aid accounted for approximately 80% of total state aid expenditure for environmental protection and energy savings, its share fell to 49% in 2022.

In 2023 and 2024, state aid for decarbonisation began to increase again, with expenditure reaching EUR 29.16 billion in 2023 and EUR 30.45 billion in the following year.

State aid for energy generation represented around 9% of total state aid expenditure for environmental protection, including energy savings, over the period from 2014 to 2024.

Starting at approximately EUR 131 million in 2014, this type of aid reached EUR 27.31 billion ten years later, in 2024, almost matching the levels of aid dedicated to decarbonisation.

State aid expenditure for environmental protection, including energy saving, by Member State

This year’s report includes a deep dive on the TCTF, which finds that the three sections of the TCTF aimed at supporting the shift away from crisis/emergency measures towards longer term, climate aligned investment (i.e. those on supporting renewable rollout, industrial decarbonization, and strategic sectors) accounted for EUR 3.8bn of spending in 2024.

For more information: State aid Scoreboard 2025

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