The role of State aid in the EU’s green recovery

The European Green Deal is increasingly leading to a mainstreaming of climate action across policy domains and has become a driving logic of economic policy. Importantly, the EU institutions and many other stakeholders have committed to using the economic recovery packages responding to the COVID-19 crisis to shift to a greener and more resilient economy. However, this will also require a (re-)evaluation of State aid law, which so far has been perceived (and classified in the EU Treaties) as a matter of competition law or internal market policy, rather than environmental or climate law. Government measures that push markets towards green growth often qualify as State aid. The EU treaties provide the European Commission with a powerful role in this regard by prohibiting State aid unless the Commission specifically approves it. Commission decisions on State aid thus play a pivotal role in effective climate and energy transition measures. In some areas (e.g., renewable energy investments, greening industr