EU companies affected by sanctions imposed on Russia in the context of the war in Ukraine could benefit from a 25% increase of up to 500,000 euro in state aid to help them cope with the impact of inflation and the energy crisis, according to a draft of the Community Executive consulted by Reuters.

The European Commission has previously announced that it will seek views from EU member states on its proposal to amend the Temporary Crisis Framework to support the economy in the context of Russia’s invasion of Ukraine before taking a final decision, according to Agerpres.

In March this year, the European Commission already relaxed its state aid provisions to allow EU member states to provide companies with support of up to 400,000 euro and compensation for up to 30% of energy costs.

Now, the EU executive wants to increase, once again, the maximum limit of state aid to 500,000 euro, and this aid will be able to take the form of direct grants, tax facilities and other forms such as repayable advances, guarantees, loans and equity.

Companies in the agricultural sector could receive state support of up to 62,000 euro and those in the fisheries and aquaculture sector- up to 75,000 euros, compared to the current limit of 35,000 euros.

The Commission also wants to reduce barriers to governments that want to invest in renewable energy, including biogas and biomethane, as well as renewable energy production, in line with its goal of reducing dependence on fossil fuels in Russia and diversification of energy sources.

“We propose an adjustment of the Temporary Framework on State Aid so that it reflects and supports the important and urgent objectives of the REPowerEU plan to accelerate the diversification of energy sources in order to become more independent of fossil fuels,” said the Vice President of the European Commission, Margrethe Vestager.

The temporary crisis framework on state aid, set up to support the economy in the context of Russia’s invasion of Ukraine under Article 107 (3) (b) of the Treaty on the Functioning of the European Union (TFEU), complements the many possibilities offered to Member States to take measures that comply with existing EU state aid rules.