Decision No 173/22/COL of 7 September 2022 to open a formal investigation into certain state aid granted under the aid scheme Norwegian Catapult

Invitation to submit comments on state aid issues pursuant to Article 1(2) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice

(2022/C 428/07)

By means of the above referenced Decision, reproduced in the authentic language on the pages following this summary, the EFTA Surveillance Authority notified the Norwegian authorities of its decision to initiate proceedings pursuant to Article 1(2) of Part I of Protocol 3 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice.

Interested parties may submit comments within one month of the date of publication to:

EFTA Surveillance Authority Avenue des Arts 19H 1000 Bruxelles/Brussel BELGIQUE/BELGIË registry@eftasurv.int

The comments will be communicated to the Norwegian authorities. The identity of the interested party submitting the comments may be withheld following a request in writing stating the reasons for the request.

Summary

Procedure

The Norwegian authorities informed ESA of the aid scheme Norwegian Catapult (‘the Catapult-scheme’ or ‘the scheme’) by information sheets with references GBER 38/2017/R&D&I and GBER 58/2020/R&D&I. According to the Norwegian authorities, the scheme complies with the General Block Exemption Regulation (‘GBER’).

ESA monitors aid measures considered by the EEA EFTA States to comply with the GBER. During its 2018 monitoring cycle, ESA assessed certain aid granted under the Catapult-scheme.

ESA concluded the monitoring by letter of 13 December 2021 (‘the recovery recommendation’). In the recovery recommendation, ESA expressed that aid granted to five beneficiaries, as investment aid for tangible assets under Article 27 GBER on aid to innovation clusters, appeared unlawful on the basis that it did not fulfil the conditions in the GBER. The apparent irregularities related to Articles 6(2) (incentive effect), 27(5) (costs eligible for investment aid) and 27(6) (intensity of investment aid) GBER. ESA therefore recommended to the Norwegian authorities to recover aid amounts as specified in the recovery recommendation.

By letter of 21 February 2022, the Norwegian authorities informed ESA that they will not follow the recommendation. In their view, the aid concerned was both lawful and compatible with the functioning of the EEA Agreement. On 24 June 2022, the Norwegian authorities submitted additional comments.

Description of the aid concerned

The Decision addresses certain aid granted as investment aid for tangible assets under Article 27(5) and (6) GBER. The aid amounts preliminarily identified in the Decision are the following:

— NOK 57,25 million to Future Materials.

— NOK 44 930 658 to Manufacturing Technology.

— NOK 55,4 million to Sustainable Energy.

— NOK 18,5 million to Ocean Innovation.

— NOK 19,96 million to Digicat.

Assessment

Pursuant to Article 27(5) GBER, investment aid may be granted for the construction or upgrade of innovation clusters. The eligible costs are specified as the investment costs in intangible and tangible assets.

It is ESA’s preliminary understanding that the concerned aid has been granted in support of leasing of equipment for which there exists no purchasing obligation. Further, it is ESA’s preliminary position that such costs do not amount to investment costs in tangible assets. This would entail that the aid has been granted in respect of costs which are not eligible under Article 27(5) GBER.

Additionally, it appears that some of the aid concerned to Future Materials relates to costs which were incurred prior to the application for this aid. This would entail that the aid granted in respect of the projects or activities to which these costs relate, did not have an incentive effect within the meaning of Article 6(2) GBER.

On the basis of the available information, ESA finds that the aid encompassed by the decision, which was granted as investment aid for tangible assets under Article 27 GBER on aid to innovation clusters, did not fulfil the conditions for aid under any other article of the GBER.

In view of these considerations, ESA preliminarily concludes that the aid was unlawful.

ESA further doubts that the aid is compatible with the functioning of the EEA Agreement.

First, ESA doubts that the aid can be declared compatible on the basis of the Guidelines on state aid for research and development and innovation (‘the RDI-guidelines’). The costs eligible for the different categories of aid are defined in Annex I of the RDI-guidelines. With respect to aid for the construction or upgrade of innovation clusters, the eligible costs are defined as the investment costs in intangible and tangible assets.

This is the same definition as that in Article 27(5) GBER. Therefore, on the basis of the same line of reasoning as that undertaken with respect to the GBER, ESA preliminarily concludes that the aid does not fulfil the applicable conditions set forth in the RDI-guidelines.

With respect to the question of compatibility directly on the basis of Article 61(3)(c) of the EEA Agreement, ESA has not previously assessed aid to innovation clusters in support of the costs of leasing tangible assets for which there exists no purchasing obligation. At this stage, ESA has identified several factors raising doubts as to the compatibility of the aid concerned.

These factors include, in particular, the questions of whether the aid was appropriate and proportional. Further, in respect of aid to Future Materials for projects or activities where costs were incurred prior to an application for aid, the establishment of an actual incentive effect would necessitate a detailed analysis on the basis of reliable evidence. At this stage, ESA has not been presented with such evidence.