EU State aid reform continues in the energy sector: Spotlight on the proposed new General Block Exemption Regulation

The European Commission has published for public consultation a proposal to revise the General Block Exemption Regulation on State aid (GBER), with its entry into force scheduled for 1 January 2027. The review is comprehensive in scope and will result in an entirely new GBER, rather than a mere amendment to the existing one. The proposal may have a major impact on aid projects in the energy sector. It is guided by the EU's Competitiveness Compass and the Clean Industrial Deal, with the aim of cutting red tape and promoting investment, whilst preserving a level playing field in the Single Market. 

By expanding the scope and flexibility of support measures, the proposed revision would enable Member States to choose from a broader range of non-notifiable funding opportunities for decarbonisation and clean energy projects.

What is the General Block Exemption Regulation on State aid (GBER)?

The GBER allows aid measures in a wide variety of sectors to be implemented without prior approval from the European Commission, provided the conditions set out in the GBER are met. Where a measure does not fall within the scope of the GBER, it is subject to notification to the European Commission. In such cases, aid projects may benefit from the newly adopted Clean Industrial Deal State Aid Framework (CISAF), which introduces simplified rules for specific clean industry and energy transition measures. Where the measure does not fall under the CISAF, it may still be approved under other State aid frameworks, such as the Climate, Energy, and Environmental Aid Guidelines (CEEAG).

Proposed changes to GBER 

The key proposed amendments to the GBER in relation to energy include the following:

Renewable energy operating aid. Under the draft GBER, the ceiling of EUR 300 million per year for the sum of the budgets of all relevant aid schemes in a Member State will be abandoned, facilitating further support for renewable energy. The individual ceiling of EUR 30 million per undertaking per project will, however, be maintained. The draft GBER also introduces new restrictions. First, renewable energy generation projects will only be eligible for operating aid if they exceed certain capacity thresholds (solar: above 80 MW; wind: above 40 MW; other renewables: above 40 MW). Second, in line with Article 19d(2) of the Electricity Regulation (2019/943), all eligible projects will be required to use two-way Contracts for Difference (CfDs), which must be awarded through a competitive bidding process.

Renewable energy "other than electricity". The new draft introduces a standalone provision covering renewable heat (including heat pumps) and renewable fuels. The eligible aid is calculated on the basis of a simplified funding gap or, alternatively, through a competitive-bidding procedure. The notification threshold is EUR 30 million per undertaking per project.

Stand-alone energy storage. Investment aid for electricity and thermal storage will no longer require a direct physical link between the storage asset and an associated renewable energy installation.

Low-carbon hydrogen. The draft GBER explicitly covers investment aid for the production, transport, supply, and refuelling infrastructure of low-carbon (blue) hydrogen, defined by reference to the delegated act on low-carbon fuels, as well as aid for climate resilience and pollution prevention. The current GBER covers only renewable (green) hydrogen. The definition of low-carbon fuels under the relevant delegated act is separately addressed in our alert EU Unveils Methodology to Calculate Emissions Savings in Low-Carbon Fuels.

Zero-emission aircraft subsidies are covered for the first time alongside vehicles and vessels.

Simplified aid calculation. Under the current GBER, the permitted aid amount is typically calculated using a counterfactual method. This approach compares the cost of the aided project with a counterfactual scenario that would occur in the absence of the aid and limits the aid to the difference between the two. The draft GBER introduces a simpler alternative: aid intensities (gross aid amount expressed as a percentage of the eligible costs) may instead be applied directly to the total eligible investment costs of a project.

Simplification of common provisions. The common provisions on transparent calculation, incentive effect, start of works, and cumulation are all simplified. For example, the incentive effect is automatically satisfied for a substantially expanded set of measures including renewable energy aid and InvestEU-supported aid.

Abolition of ex post evaluation. Since the entry into force of the current GBER in 2014, EU Member States have been required to carry out an ex post evaluation of large block-exempted aid schemes on the basis of previously notified and approved evaluation plans. To alleviate the administrative burden, the European Commission will abolish this evaluation requirement. The European Commission remains competent to assess at any time whether aid measures have been granted in line with the conditions of the GBER.

Clean Industrial Deal State Aid Framework (CISAF)

Adopted on 25 June 2025, the CISAF sets out how EU Member States can design State aid measures to support the objectives of the Clean Industrial Deal. It is the European Commission's principal new instrument to facilitate industrial decarbonisation, boost clean-tech manufacturing, and accelerate clean energy rollout. 

More specifically, the framework introduces a fast-track procedure for the deployment of renewable energy, low-carbon fuels (including hydrogen), and flexibility and capacity mechanisms, in order to support the integration of intermittent generation while safeguarding security of supply. It also enables targeted support for electricity costs for energy-intensive users, subject to commitments to invest in decarbonisation. Finally, the framework provides flexible investment support for a broad range of decarbonisation and energy-efficiency technologies, including electrification, hydrogen, biomass and carbon capture, utilisation and storage.

The advantage over the GBER is that aid granted under CISAF can be approved with fewer restrictions on a case-by-case basis. The compatibility assessment of the CISAF allows the general compatibility conditions (such as necessity, appropriateness, proportionality and competition effects) to be met more easily through specific conditions laid out for each measure. This is the general advantage over CEEAG, where the notification process is more burdensome.

Climate, Energy, and Environmental Aid Guidelines (CEEAG)

The CEEAG, which were updated in January 2022, continue to apply in parallel and may be used by EU Member States for larger and more complex support measures.  

Whilst the CEEAG covers a significantly wider range of State aid projects than CISAF, the obligations on Member States and the assessment of individual State aid measures are considerably more extensive and therefore more time-consuming than under CISAF.

Key Takeaways

The interaction between the GBER, CISAF, and the CEEAG is complex, and careful instrument selection at the earliest stage of project development remains essential. In particular:

• Aid projects covered under the GBER are procedurally the least complex, as they do not have to be notified to the European Commission. On the other hand, eligible aid intensity and total eligible aid amounts are considerably lower than under the CISAF and/or CEEAG. Member States should therefore carefully assess whether the aid amounts and intensities eligible under the GBER are sufficient to reach the objectives of planned aid measures and/or how burdensome and lengthy a notification of higher amounts might be.
• If the aid measure falls under the CISAF, an individual notification may be preferable, taking into account that the aid intensities are normally higher and the notification process is relatively straightforward.
• CEEAGs are the instrument of choice when projects do not fall under the GBER due to the level of aid sought or for other reasons, and do not fall under the CISAF due to their nature. 

Interested parties have until 23 April 2026 to submit their comments to the European Commission using this link.

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