Contrary to the call1 of FEAD and other stakeholders, circular economy measures have not been included in this new State aid framework. Instead, the CISAF states that measures supporting the circular economy, may already be granted under existing frameworks. This includes the General Block Exemption Regulation the Guidelines on State aid for Climate, Environmental protection and Energy (‘CEEAG’). The Commission encourages Member States to make full use of the existing possibilities to reach the common goals of the Clean Industrial Deal and will treat such cases as a priority.
Earlier this month, at the 17 June Environment Council, the Commission presented2 to Member States the key challenges that are undermining the recycling sectors’ competitiveness and long-term viability. On the occasion, the Commission also invited Member States to take measures that would support the sector in overcoming the current economic conjecture while driving circularity upwards. Among others, state aid measures.
FEAD joins the Commission’s encouragement to Member States to use all available tools to support the waste management industry in the EU, not only by supporting investments in European recycling capacities, but also by preserving existing recycling capacities at the edge of collapse. Recycled materials remain more expensive than virgin ones due to lower raw material prices and unfair competition from imports with lower environmental standards. To bridge the price gap between virgin/new and recycled materials, Member States must support existing installations by providing temporary exploitation subsidies until EU recycled content targets kick in and/or the market for recyclates has become a sustainable business model. This must be organised short term to save the current recycling infrastructure in Europe.
