Commission approves €500 million French State aid scheme to support chemical recycling of plastic waste

This article is brought to you in association with the European Commission.

The European Commission has approved, under EU State aid rules, a €500 million French scheme to support the chemical recycling of certain types of plastic waste. The measure contributes to the achievement of the priorities of the European Commission for 2024-2029, based on the Political Guidelines, which call for a more circular and resilient economy.

The French scheme

France notified the Commission of its plans to introduce a €500 million scheme to support investments for the chemical recycling of certain types of plastic waste,such as trays, films, non-beverage bottles and textile materials with a certain amount of polyester content. The scheme aims to support chemical recycling technologies that convert mixed and/or contaminated plastic waste back into ‘virgin-like’ raw materials. The scheme will contribute to the EU’s objective of circularity of production and consumption processes as part of a broader transformation of the industry towards climate neutrality.

Under the scheme, the aid will take the form of direct grants. The scheme is open to companies of all sizes and operating in all sectors. The maximum amount of aid is 40% of the eligible costs, which are the extra investment costs calculated by comparing the total investment costs of a project of chemical recycling of plastic waste with those of less environmentally friendly projects.

The Commission’s assessment

The Commission assessed the measure under EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the EU (‘TFEU’), which enables Member States to support the development of certain economic activities subject to certain conditions, and the Guidelines on State aid for climate, environmental protection and energy 2022 (‘CEEAG’).

This is the first State aid scheme assessed under Section 4.4 of the CEEAG, which allows aid for resource efficiency and for supporting the transition towards a circular economy.

The Commission found that:

• The scheme is necessary and appropriate to allow for the deployment of chemical recycling of plastics.
• The scheme has an ‘incentive effect‘ as the beneficiaries would not carry out the relevant investments without the public support.
• France has put in place sufficient safeguards to ensure that the scheme has a limited impact on competition and trade within the EU. In particular, the scheme is open to all companies operating in all sectors and the aid is limited to the minimum necessary to undertake the projects.

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

Background

The 2022 CEEAG provide guidance on how the Commission will assess the compatibility of aid measures for environmental protection, including climate protection, and energy  which are subject to the notification requirement under Article 107(3)(c) TFEU.

The non-confidential version of the decision will be made available under the case number SA.108044 in the State aid register on the DG competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.