The European Commission has approved under EU State aid rules Portugal's map for granting regional aid from 1 January 2022 to 31 December 2027, within the

framework of the revised Regional aid Guidelines ('RAG').

The revised RAG, adopted by the Commission on 19 April 2021 and in force since 1 January 2022, enable Member States to support the least favoured European regions in catching up and to reduce disparities in terms of economic well-being, income and unemployment – cohesion objectives that are at the heart of the Union. They also provide increased possibilities for Member States to support regions facing transition or structural challenges such as depopulation, to contribute fully to the green and digital transitions.

At the same time, the revised RAG maintain strong safeguards to prevent Member States from using public money to trigger the relocation of jobs from one EU Member State to another, which is essential for fair competition in the Single Market.

Portugal's regional aid map defines the Portuguese regions eligible for regional investment aid. The map also establishes the maximum aid intensities in the eligible regions. The aid intensity is the maximum amount of State aid that can be granted per beneficiary, expressed as a percentage of eligible investment costs.

Under the revised RAG, regions covering 70.23% of the population of Portugal will be eligible for regional investment aid:

• Outermost regions can be designated by Member States as eligible for aid under Article 107(3)(a) TFEU (so-called ‘a' areas). In Portugal, two outermost regions (Região Autónoma dos Açores and Região Autónoma da Madeira) will continue to be eligible for aid as ‘a' areas. In these areas, the maximum aid intensities for large enterprises vary between 40% and 50%, depending on the GDP per capita of the respective outermost region.
• The regions of Norte, Centro (PT) and Alentejo are among the most disadvantaged regions in the EU, with a GDP per capita below 75% of the EU average. These regions are also eligible for aid under Article 107(3)(a) TFEU, with a maximum aid intensity for large enterprises of 30%. Furthermore, the Commission approved an increase of the maximum aid intensity from 30% to 40% for two regions within these ‘a' areas, due their relatively high population loss over the past decade (Beiras e Serra da Estrela and Alto Alentejo).
• In order to address regional disparities, Portugal has designated as so-called non-predefined ‘c' areas (under the derogation of Article 107(3)(c) of the TFEU) parts of Área Metropolitana de Lisboa and of Algarve. In these areas, the maximum aid intensity for large enterprises will be 15%, so that the difference in aid intensity with the bordering ‘a' areas is limited to 15 percentage points.

In all the above areas, the maximum aid intensities can be increased by 10 percentage points for investments made by medium-sized enterprises and by 20 percentage points for investments made by small enterprises, for their initial investments with eligible costs up to €50 million.

Once a future territorial Just Transition plan in the context of the Just Transition Fund Regulation will be in place, Portugal has the possibility to notify the Commission an amendment to the regional aid map approved today, in order to apply a potential increase of the maximum aid intensity in the future Just Transition areas, as specified in the revised RAG for ‘a' areas.

Background

Europe has always been characterised by significant regional disparities in terms of economic well-being, income and unemployment. Regional aid aims to support economic development in disadvantaged areas of Europe, while ensuring a level playing field between Member States. 

In the RAG, the Commission sets out the conditions under which regional aid may be considered to be compatible with the internal market and establishes the criteria for identifying the areas that fulfil the conditions of Article 107(3)(a) and (c) of the Treaty on the Functioning of the European Union (‘a' and ‘c' areas respectively). Annexes to the Guidelines identify the most disadvantaged regions, so-called ‘a' areas, which include the outermost regions and regions whose GDP per capita is below or equal to 75% of the EU average, and the pre-defined ‘c' areas, representing former ‘a' areas and sparsely populated areas.

Member States can designate the so-called non-predefined ‘c' areas, up to a maximum pre-defined ‘c' coverage (for which figures are also available in Annexes I and II to the Guidelines) and in line with certain criteria. Member States need to notify their proposal for regional aid maps to the Commission for approval.

The non-confidential version of today's decision will be made available under the case number SA.100752 (in the State Aid Register) on the DG Competition website. New publications of state aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News. Photo by Smooth_O, Wikimedia commons.