Contribution to the European Commission’s consultation on the Draft State Aid Framework supporting the Clean Industrial Deal (CISAF).

Balanced Economy Project, Rebalance Now and SOMO welcome the opportunity to contribute to the European Commission’s consultation on the Draft State Aid Framework supporting the Clean Industrial Deal (CISAF).

In our submission, we support the use of public investment to accelerate the green transition and make supply chains more resilient with a State aid framework to facilitate this. However, the CISAF needs strict safeguards to avoid market concentration and subsidy races across the Internal Market.

Our comments aim to enhance the development and implementation of a CISAF that ensures a fair and inclusive transition. We stress that clearer criteria outlined in the draft CISAF should provide governments and business with more predictability on the types of support schemes that can be proposed for investments contributing to the Clean Industrial Deal (CID).

However, simplification of rules must not:

· Increase the risk of competition distortions and subsidy races in the Internal Market.

· Weaken social and environment protections - companies should demonstrate public funding is used to further the EU’s social and environmental objectives, through public reporting on emission reductions, green innovation and job creation.

· Disproportionately benefit larger Member States with greater fiscal firepower, and increase the prospect of large and dominant companies capturing the majority of the funding, elbowing SMEs aside.

· Create or protect national champions to avoid nurturing unhealthy relationships between big business and governments, undermining the CID’s growth and productivity objectives, and promote an unproductive focus on chasing European “competitiveness”, rather than delivering outcomes necessary to achieve the green transition.