General Block Exemption Regulation

The General Block Exemption Regulation (GBER) harmonises the rules which previously existed across five separate Regulations, and enlarges the categories of state aid covered by the exemption.

As well as encouraging Member States to focus on aid that will be of real benefit to job creation and competitiveness, the Regulation reduces the administrative burden for the public sector, the beneficiaries and the European Commission.

From 1 July 2014 a new GBER was adopted which includes additional categories and provisions for awarding compliant state aid.

From 10 July 2017, the GBER was expanded to include ports and airports, to increase the scope of existing articles, and to give additional eligible costs and upper thresholds.

Sectoral restrictions

The GBER applies to all sectors of the economy with some exceptions. Sectoral restrictions are set out in Article 1, paragraphs 3-5 of the Regulation and include specific activities in the fishery and aquaculture sectors, in the primary production of agricultural products, the coal sector, the steel sector, shipbuilding and the synthetic fibres sector.

Provisions

The current GBER will remain in force until 31 December 2020 and authorises aid in favour of:

  • Regional Investment
  • Aid to SMEs
  • Aid for access to finance for SMEs
  • Environmental Protection
  • Consultancy in favour of SMEs
  • Research, Development and Innovation
  • Training
  • Employment of Disadvantaged and Disabled Workers
  • Culture and Heritage conservation
  • Local Infrastructures
  • Broadband Infrastructures
  • Sport and multifunctional recreational infrastructures
  • Transport for residents of promoted regions

Each of the GBER articles which cover the activities listed above lists the eligible costs which may be assisted and the aid intensities (limits) which apply to these activities.

Cumulation

To ensure that relevant maximum aid intensities or aid amounts are not breached, all forms of public funding used to fund eligible project costs must be taken into account and cumulated, irrespective of whether the support is financed from local, regional, national or community sources.

Example 1:

The Scottish Government wishes to award grant funding to an R&D&I project under Article 25(d) of the GBER. The total project costs are £200,000 and the maximum aid intensity set out in Article 25(d) is 50%.

Project funding is listed as follows:

  • Local Authority – £30,000 grant
  • Company’s own contribution – £80,000

As the maximum aid intensity is 50% of eligible project costs, the maximum funding from public sources for this project is £100,000 (50% x £200,000).

£30,000 of the project’s funding is being provided by the local authority (public funds). This must be cumulated (added) to all other forms of public support to avoid breaching the aid intensity.

The maximum public funding  that can be awarded to avoid breaching the aid intensity is therefore £70,000 (£70,000 + £30,000 = £100,000)

Aid exempted by the GBER can be supported by other aid exempted by the GBER as long as those aid measures concern different identifiable eligible costs (For example two or more GBER Articles can be used to support clearly divisible project costs without recourse to cumulation).

Aid exempted by the GBER shall not be cumulated with De Minimis aid relating to the same - partly or fully overlapping - eligible costs if such cumulation would result in exceeding the highest aid intensity or aid amount applicable to this aid under this regulation.

Example 2:

A small community based manufacturing company is seeking funding to employ workers with disabilities.

Grants will be awarded from two funding bodies under the terms of -

  • Article 33 - Aid for the employment of workers with disabilities in the form of wage subsidies (Maximum aid intensity shall not exceed 75% of eligible costs)
  • Article 34 -Aid for compensating the additional costs of employing workers with disabilities (Aid intensity shall not exceed 100% of the eligible costs)
     

GBER cover

Public funding source  X

Public funding  source Y

Wage subsidies (Art. 33)

Eligible costs = £20,000

£10,000

(50%)

£5,000

(25%)

Additional costs (Art. 34)

Eligible costs = £10,000

 

£9,000

(90%)

The manufacturing company can receive grants from both funding bodies towards wage subsidies for disabled workers, however the combined awards must not exceed £15,000 (75% of the eligible costs).

However, the company may receive an additional grant towards the additional costs such as adaptations to the premises up to 100% of these costs as this is a separate identifiable cost. 

Notification

Member States must provide the EC, within 20 working days of granting aid under a new scheme with the required, electronic, summary notification information. This can be done with the help of the State Aid Team.

Annual reporting

Member States must compile an annual report to be submitted to the State Aid Unit on request; for on-pass to the EC within three months after the expiry of the period to which the report relates. The EC provides each scheme or ad hoc aid notified under this BER with a unique reference number. This should be quoted for annual reporting requirements. Public funders may also wish to inform aid recipients of this number when granting aid.

Member States are required to keep detailed records of aid schemes operating under GBER for 10 years from the date of granting each aid. Member States must also, on written request, provide the EC, within 20 working days, with all the information the EC considers necessary to assess that the conditions of the GBER have been observed.

Contact the State Aid Team for more information.