In response to the ongoing Russia-Ukraine crisis, the European Commission has granted approval for a Polish aid scheme worth approximately €1 billion (PLN 4.7 billion) to support the liquidity of agricultural producers. The scheme was approved under the State Aid Temporary Crisis and Transition Framework, which aims to provide assistance in sectors crucial for accelerating the green transition and reducing fuel dependencies.
The Polish measure, proposed by Poland and notified to the European Commission, entails providing limited amounts of aid in the form of direct grants to agricultural producers. The objective of the scheme is to address liquidity shortages faced by farmers due to the rising costs of mineral fertilizers and the instability in the agricultural market caused by the ongoing crisis between Russia and Ukraine.
The European Commission assessed the Polish scheme and determined that it complies with the conditions outlined in the Temporary Crisis and Transition Framework. The aid provided will not exceed €250,000 per beneficiary and must be granted by December 31, 2023.
Based on its evaluation, the Commission concluded that the Polish scheme is necessary, appropriate, and proportionate to mitigate the serious economic disturbances experienced. This approval falls under Article 107(3)(b) of the Treaty on the Functioning of the European Union and aligns with the conditions specified in the Temporary Crisis and Transition Framework.
The adoption of the Temporary Crisis and Transition Framework on March 9, 2023, by the European Commission aims to facilitate support measures in sectors essential for the transition to a net-zero economy, in line with the Green Deal Industrial Plan. This framework, along with the amendment to the General Block Exemption Regulation, provides avenues for speeding up investments and financing for clean tech production in Europe and assists Member States in implementing projects under their National Recovery and Resilience Plans.
The Temporary Crisis and Transition Framework was developed to enable Member States to utilize the flexibility permitted under state aid rules to support their economies amidst the Russia-Ukraine crisis. It has undergone amendments on July 20, 2022, and October 28, 2022, in accordance with the REPowerEU Plan objectives and the regulations addressing high energy prices and enhancing solidarity in gas purchases.
The framework offers various types of aid that Member States can provide, including limited amounts of relief for affected companies, liquidity support in the form of state guarantees and subsidized loans, support to compensate for high energy prices, measures to accelerate renewable energy deployment, support for decarbonizing industrial processes, efforts to support electricity demand reduction, and actions to expedite investments in sectors for the net-zero transition.
Measures specifically targeting the green transition and reducing fuel dependencies will be in effect until December 31, 2025. Other provisions of the Temporary Crisis Framework, focused on immediate crisis response, will remain applicable until December 31, 2023. The Commission will assess the need for a potential extension to ensure legal certainty.
The approval of the Polish aid scheme underlines the commitment of the European Commission to support Member States during the ongoing Russia-Ukraine crisis. By providing financial assistance to Polish farmers, the aid scheme aims to alleviate the liquidity challenges faced by agricultural producers and contribute to the stability of the agricultural sector in Poland.
Image provided by Tom Fisk
