State aid: EU Commission approves €30 million Luxembourg scheme to support research and development and investments in the production of coronavirus relevant products

The European Commission has approved a €30 million Luxembourg aid scheme to support coronavirus related research and development (R&D) and investments in the production of products relevant to the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April 2020.

The scheme is open to small, medium-sized and large enterprises of all sectors. Aid will be granted in the form of direct grants to enhance and accelerate research and the production of products directly relevant to coronavirus. These include medicinal products including vaccines, hospital and medical equipment including ventilators, protective clothing and equipment as well as diagnostic tools.

In particular (i) the R&D part of the scheme covers fundamental research, industrial research and experimental development projects; (ii) the investment part of the scheme will cover 80% of the eligible costs that companies have to bear to create production capacities to manufacture coronavirus relevant products.

The Commission found that the Luxembourg scheme is in line with the conditions set out in the Temporary Framework. To support quick action, companies may also benefit from a bonus when their investment is concluded within two months after the granting of the aid.

The Commission therefore concluded that the aid scheme will contribute to the achievement of a common objective of crucial importance, is necessary, appropriate and proportionate to fight the health crisis in line with Article 107(3)(c) TFEU and the conditions set out in the Temporary Framework.

On this basis, the Commission approved the measures under EU State aid rules.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “There is a global consensus on the importance of enhancing and accelerating coronavirus related research and the production of relevant products to address the current emergency health crisis.

The €30 million Luxembourg scheme we approve today will provide incentives to companies to direct their activities to research and production of certain products, which are most crucial in the current circumstances. It is a clear sign that we continue to work closely with all Member States to find solutions to fight the pandemic in line with EU rules.”

Arianna Podesta – Giulia Astuti – Maria Tsoni –