The European Commission has approved, under EU State aid rules, a €126 million Romanian scheme to support investments in ports facing increased trade flows after Russia’s war against Ukraine. The measure facilitate flow trades in and from Ukraine in line with the objectives of the EU’s Solidarity Lanes action plan.
The Romanian scheme
Romania notified to the Commission its plans to support companies active in certain Romanian ports to invest in additional handling or storage facilities for processing goods deviated from their normal trading routes due to Russia’s war against Ukraine, and the collapse of Ukraine’s direct maritime export routes. The scheme, with a budget of €126 million (around RON 626 million), will run until 31 December 2024.
Under the scheme, the aid will take the form of grants up to €10 million to logistics companies active in Romanian maritime and inland ports located on: (i) the eastern border of the EU (Constanta, Galati, Giurgiu); (ii) the Danube – Black Sea Canal (Poarta Alba, Midia, and Navodari); (iii) the Sulina Canal or in the “satellite” ports of Constanța (Midia, and Mangalia). The aid cannot exceed the lowest of the following amounts: (i) €10 million per beneficiary, (ii) the funding gap, or (iii) 65% of the eligible costs of the project.
The measure will be partly funded through EU Cohesion funds and will contribute to the functioning of the EU-Ukraine Solidarity Lanes by facilitating the trade flows in and from Ukraine.
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 European Union, which enables Member States to support the development of certain economic activities subject to certain conditions.
The Commission found that:
- The aid is necessary and appropriate to trigger the investment, which could not be carried out absent the aid as neither a market investor nor any financial institution would have financed it on commercial terms due to the uncertainties linked to the Russian war and the temporary nature of the trade flows it created.
- The aid is proportionate and limited to the minimum necessary to trigger the investments. Moreover, the aid level is based on a proven funding gap. Operators can receive only the aid that is necessary to cover the additional cost of equipment and storage needed for handling goods diverted from their normal trading routes.
- The positive effects of the aid outweigh any potential negative effects on competition and trade between EU Member States. The trade flows concerned have naturally appeared in the ports that are geographically closest to Ukraine and will disappear once the crisis is resolved.
On that basis, the Commission approved the Romanian scheme under EU State aid rules.
For More Information
The non-confidential version of the decision will be made available under the case number SA.109965 in the State aid register on the Commission’s 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.