The Hague, 14 March 2022

HT.6323 Response of the Netherlands on the draft COMMUNICATION FROM THE
COMMISSION for a Temporary Crisis Framework for State Aid measures to support the
economy following the invasion of Ukraine by Russia
This response reflects the views of the Dutch ‘Interdepartementaal Staatssteun Overleg
(hereafter: ISO)’. The ISO is a central State aid coordination body composed of all Dutch
ministries and representation of the regional and local authorities. The ISO is chaired by the
Ministry of Economic Affairs and Climate Policy. The Minister of Economic Affairs and Climate
Policy is responsible for competition policy in the Netherlands.
1. General remarks
The Dutch authorities would like to thank the European Commission for the opportunity to
comment on a draft proposal for a State aid Temporary Crisis Framework to support the
EU economy in the context of Russia’s invasion of Ukraine (hereafter: the Temporary Crisis
Framework). With this draft proposal the Commission would like to enable Member States
to grant state aid to companies affected by the current crisis in order to:
(i)

(ii)

(iii)

allow Member States to grant temporary liquidity support to all companies
affected by the current crisis. This support could take the form of guarantees and
subsidised loans.
allow Member States to grant aid for additional costs due to exceptionally high
gas and electricity prices following the invasion of Ukraine by Russia. This support
could be granted in any form, including limited grants, to partially compensate
companies, in particular intensive energy users, for energy price increases.
In addition, the Commission would also seek the views of the Member States on
whether the targeted amendments to the ETS State aid guidelines, on which
Member States were already consulted on 21 February 2022, are still warranted
and whether additional amendments are necessary in view of the proposed
Temporary Crisis Framework.

Summary of the Dutch position
The Dutch authorities have serious concerns regarding the suitability, the proportionality
and effectiveness of this draft proposal. In particular this draft proposal doesn’t seem to be
aligned with the climate targets of the Union and seems to lower the economic incentives to
a transition to a sustainable economy, which is undesirable. The Dutch authorities invite the

Commission to implement more possibilities to speed up or make easier sustainable (green)
investments which could help European undertakings to move away from fossil fuels, also in
order to become less dependent on Russia. In particular, the Dutch authorities would like to
propose the following adjustments.
The Dutch authorities argue that this Temporary Crisis framework should in any case:
a) be more limited in scope and directed to the sectors and companies that are affected
most by the specific characteristics of this crisis;
b) should be contingent on green conditionalities where possible, especially with regard to
the large energy intensive industries;
c) should take into account the nature of the current economic impact, which no longer calls
for liquidity support for most segments in the economy but rather for temporary targeted
support for energy-intensive companies or companies whose supply chains have been
disrupted and which need to reorganize their supply chains;
e) introduces more safeguards to prevent distortion of competition or the integrity of the
internal market.
The Dutch authorities invite the Commission to closely look at the economic substantiation
and expected economic impact of the proposal, also in relation to the level playing field, and
invite the Commission to provide improvements and adjustments.
2. Specific remarks
The Netherlands would like to raise the following issues, please find
below the description of the above adjustments in more detail.
The draft proposal states that the objective of the Temporary Crisis Framework is to remedy
the economic effects following the invasion of Ukraine by Russia and the following economic
sanctions adopted in this context. The Commission argues that undertakings in the EU may
be affected in multiple ways, both directly and indirectly. This may take the form of shrinking
demand, disruptions in the supply chain, in particular of raw materials and pre-products, or
other inputs no longer being available or not being economically affordable. The current
crisis results also in a disruption of supply chains for EU imports from Ukraine for certain
products, especially cereals and vegetable oils, as well as for EU exports to Ukraine. That
situation also affects the energy market, in particular electricity, gas and oil prices in the
European Union, a major input for several economic activities, including those particularly
hit by the COVID outbreak like travel and tourism. Could the Commission acknowledge that
also transport is particularly affected by this crisis?
The Netherlands acknowledge that the current crisis has created significant economic
uncertainties, disrupted trade flows and supply chains and corresponding transport
movements and has led to exceptionally large and unexpected price increases, especially in
natural gas and electricity and certain raw materials. However the Commission should clarify
more why the economic impact of the current crisis would require a broad crisis state aid
instrument which covers most segments of the economy. Especially as it is a common

principle to all Member States and confirmed by the ECJ that under union law there is not a
general principle requiring compensation to be paid in all circumstances when damages
occur either by natural occurrences or measures taken by public authorities. Further the
draft proposal lacks a clear connection to the RePowerEU communication from the
Commission: the draft proposal has a broad scope and targets whole segments of the
economy while RePowerEU identifies key areas where measures are needed to mitigate the
effects of the current crisis, diminish risks and exposure of the Union and facilitate a speedy
transition. Both documents do not seem to be aligned. The draft proposal should also take
into account the instruments available under the Common Agricultural Policy for the
regulation of the agricultural markets and its products (i.e. the first pillar which deals with
some of the issues identified in this draft proposal). Furthermore the draft proposal could
clarify more what other EU instruments - such as the Cohesion and structural funds - are
available to mitigate the economic impact of this crisis.
Although the Netherlands acknowledge that in these exceptional circumstances State aid
for (directly) affected companies in specific sectors can be necessary, we advocate a more
targeted and limited approach than laid down in this draft proposal. For example to mention
in the proposal which sectors and companies are affected most. The Dutch authorities have
serious concerns that the broad approach of the State aid possibilities in this draft can harm
fair competition and the level playing field in the European Union. There seem to be little
safeguards in place to prevent misuse. This is especially a cause of concern as cumulation
with regular State aid guidelines, the Temporary Covid-19 State aid framework and the
possibilities to grant aid to make good the damage caused by exceptional occurrences under
article 107(2)(b) TFEU, to a certain extent, are not ruled out.
Because cumulation to a certain extent is not ruled out, it is important that the Commission
clarifies more in the text of the proposal what requirements should be taken into account to
prevent overcompensation.
The Dutch authorities would like to point out that keeping competition and innovation as the
basis of the single market requires a strict state aid policy. For these reasons, if State aid is
necessary and appropriate to tackle the problems of certain companies affected by the
current crisis, the possibilities under the regular State aid guidelines should be explored
first. Regular State aid guidelines have safeguards to prevent overcompensation and often
are conditional on green requirements. A Temporary Crisis Framework should be the
exception. Just to prevent any miscommunication, the Dutch authorities do see the need for
(large) investment aid – where necessary – to speed up the energy transition.
Could the Commission further elaborate why this current crisis – compared to other crises in
which EU sanctions are in place (e.g. first Gulf War) - requires a Temporary Crisis Framework
(where do you draw the line) ? Could the Commission clarify how it can be monitored that
overcompensation is prevented? Companies could for example pass on the higher electricity
prices to their customers while benefitting from State aid.
Article 107 (2) (b) TFEU
Point 19 of the draft proposal states that Member States may also grant aid to make good
the damage caused by exceptional occurrences under Article 107(2)(b) TFEU. Such State aid

aimed at mitigating damage directly caused by the current and exceptional occurrences of
the Russian military aggression against Ukraine may also cover certain direct effects of the
economic sanctions taken in response or other restrictive measures negatively affecting the
beneficiary from operating its economic activity or a specific and severable part of its
economic activity. Could the Commission elaborate on this statement laid down in point 19
of the draft proposal ? This possibility could provide for one off liquidity needed to deal with
one off shock effects without causing structural distortion of competition.
Point 22 of the draft proposal states that aid granted by Member States to banks under
Article 107(2)(b) TFEU to compensate for direct damage suffered as a result of the current
crisis, which does not have the objective to preserve or restore the viability, liquidity or
solvency of an institution or entity would not be qualified as extraordinary public financial
support under the BRRD nor under the SRM Regulation, and would also not be assessed
under the State aid rules applicable to the banking sector. The Dutch authorities do not
support this. As for point 24 of the draft proposal, could the Commission clarify why this
would be justified? The financial frameworks and reserve requirements for banks are also
meant to deal with so called “black swan events”.
Need for green conditionalities
It is also unclear why the Commission does not consider sustainable and green conditions to
be necessary under this proposal. As this is also an energy crisis, State aid should be directed
to the transition to the sustainable or low carbon economy. This means the Dutch
authorities would consider it appropriate to make the aid, in particular for energy intensive
business, contingent upon some form of green conditionality, for example as regards
demand reduction, peak shaving, or other energy efficiency measures, or to incentivize
green investment through the level of the aid intensities. Also the “Do Not Significant
Harm”-principle should be respected. As green incentives are important, the Dutch
authorities remark that a permanent lowering of the energy tax would not be considered in
line with the climate targets and would lower the economic incentives to the transition to a
sustainable economic activity. Speeding up energy efficiency measures and green
investments should not be slowed down by the (untargeted) operational support under this
draft proposal.
In line with this, the Dutch authorities can support the Commission in its reasoning that State
aid is not suitable for staving off necessary responses of the wider economy to structural
shifts in the energy market. Long-term trends of rising prices (as happened on the oil
markets in the past) require adaptations of industry and other demand to the new situation.
Furthermore, operational support for energy consumption could be both very costly and
difficult to align with the objectives of the Green Deal. Therefore the Dutch authorities call
upon the Commission to – if implemented - phase out this Temporary Crisis Framework as
soon as possible and to redesign its broad liquidity measures.
To this end and as an answer to your question seven in the EU Survey, the Dutch authorities
would like to remark the following. In the REPowerEU package the Commission proposed to
increase our yearly import of LNG by 50bcm. In order to achieve this, extra LNG-import
capacity is needed. The Netherlands is exploring ways to achieve extra import capacity in the
short term. To achieve these adaptations to our LNG-network, financial support may be

needed. We call on the European Commission to use the full flexibility of its State aid
toolbox to allow Member States to implement such adaptations, and if necessary explore
the need for additional possibilities under State aid rules.
ETS State aid guidelines
As the Commission is also seeking the views of the Member States regarding the targeted
amendments to the ETS State aid guidelines, the Dutch authorities would like to point out
the following. The Commission has proposed in an adjustment of the ETS Guidelines the
possibility to expand the list of eligible sectors and a more gradual transition to the new CO2
emission factor in cases where the decrease in the standard CO2 emission factor compared
to the one in the previous Guidelines for the period 2012-2020 is particularly large.
Firstly the Netherlands note that the ETS State aid Guidelines are designed to lower the risk
of carbon leakage caused by the indirect ETS costs and not to compensate for generally high
energy prices. We are not sure the targeted amendments to the ETS State aid guidelines set
an appropriate precedent anyhow. To minimize the risk of a tilted playing field within
Europe, the Netherlands called for the inclusion of a time cap on the current ETS guidelines
extensions to ensure a more timely evaluation to avoid countries from over-compensating
their industries. However since the Commission is proposing a new category ‘Aid for
additional costs due to exceptionally severe increase in gas and electricity prices’ the Dutch
authorities consider the proposed revision of the ETS Guidelines post-2021 not warranted. In
any case the ETS Guidelines post-2021 (with or without the proposed revision or possible
other revisions) should be aligned with this proposal of a Temporary Crisis Framework – if
implemented - to prevent misuse and overcompensation.
For the (most affected) non ETS eligible sectors and particularly for SME’s in sectors most
affected by this crisis, point 39 of this draft proposal could be helpful (the Dutch authorities
find a repayable advance instrument suitable). In order to minimize the risk of undermining
necessary incentives for a faster transition to energy efficiency measures, this should be
accompanied with green conditionalities.
Temporary Crisis State aid only for more targeted sectors and undertakings

As explained above, in the opinion of the Dutch authorities, this proposal should be more
limited in scope and directed to the sectors and companies that are affected most by the
specific characteristics of this crisis. Sectors that seem to be particularly affected by this
current crisis are for example the transport and logistic sector and the agricultural and
fishery sector. The agricultural and fishery sector, for example, requires a lot of energy and
other resources, including man power and logistics, to help maintain the food security, for
example the (food) horticulture, floriculture and agriculture. This sector could be affected by
higher input costs. The higher input prices will affect all prices of agricultural products that
can form a high risk for food security. So especially for this essential sector, we see a need to
support farmers for other input costs (such as feed costs or fertilizer costs), to the extent
they are subject to similar price movements as energy. For the affected sectors the
possibilities under this draft seem therefore helpful. However the draft should also take into
account the possibilities under the Common Agriculture Policy (first pillar) and align state aid

with those possibilities to ensure an efficient and quick support of the sectors concerned
while ensuring a level playing field.
Remarks concerning paragraph 2.1. LIQUIDITY SUPPORT IN THE FORM OF GUARANTEES and
2.2. LIQUIDITY SUPPORT IN THE FORM OF SUBSIDISED LOANS
The Commission proposes to ensure access to liquidity to undertakings affected by the
current crisis, public guarantees on loans for a limited period and liquidity support in the
form of subsidised loans.
Could the Commission clarify more what the link is between the need for this general
liquidity support across the whole economy and the Ukraine crisis? Why does the
Commission not require that companies should have a certain loss of revenue linked to the
crisis benchmarked against 2021? Why does the Commission not look only at the year 2021
in point 34, point d sub (i) in order to take into account the Covid-19 effects and eliminate as
much as possible those effects from the benchmarking exercise?
With regard to point 34, sub e, the Dutch authorities propose to shorten the duration of the
guarantee as this proposed duration is not needed because the positive effects of the
transition can be expected earlier. Also with regard to point 34, sub a, the guarantee
premiums for large undertakings should be set higher. Could the Commission clarify more
why large undertakings are not able to attract private capital from the markets, especially
when listed?
The draft proposal states in point 34, sub c, that the guarantee is granted by 31 December
2022 at the latest. The Dutch authorities propose to shorten this duration as this long
duration is not necessary to cover for the absorbing of the shock effect. The Dutch
authorities find the end of Q3 more appropriate as most realignment of businesses and
energy supply must occur before the onset of the winter 2022-2023.
Point 34, sub f, states that the guarantee shall relate to investment and/or working capital
loans. The Dutch authorities propose to connect these investments or working capital loans
more to the actions mentioned in the RePower EU communication from the Commission.
Point 46 of the draft proposal states that the Commission applies this Communication from
[XX March 2022], having regard to the economic impact of the Russian aggression against
Ukraine and following sanctions, which required immediate action. The Dutch authorities are
not in favour of setting this date on 1 January 2022.
This draft proposal states that loans and guarantees may not be granted to: i) undertakings
targeted by economic sanctions adopted by the EU; or ii) to undertakings owned or
controlled by persons, entities or bodies targeted by restrictive measures adopted by the EU;
or iii) undertakings controlled by Russian persons, entities or bodies. Could the Commission
give guidance how to monitor or implement specifically point iii ?

Remarks concerning paragraph 2.3 AID FOR ADDITIONAL COSTS DUE TO EXCEPTIONALLY
SEVERE INCREASE IN GAS AND ELECTRICITY PRICES

The Commission considers that, beyond the existing possibilities based on Article 107(3)(c)
TFEU, temporary support could alleviate exceptionally severe increases in the price of gas
and electricity, which undertakings may not be able to pass on or adapt to in the short-term.
Could the Commission align this paragraph more closely with the October Communication
and her RePowerEU communication and explain when exceptions to the concepts laid down
in those documents are warranted?
Could the Commission clarify how point 39, point f, could prevent negative incentives and
clarify the impact on those companies that have hedged their energy or raw materials, while
their competitors didn’t and may now profit from State aid?
Could the Commission elaborate how to prevent the economic negative effects of the
introduction of point 40 ? Should large undertakings not be supported, if necessary, with aid
under the RR guidelines or large investment support for the transition to a sustainable or
low carbon economy?