State Aid: Middle East Crisis Temporary State Aid Framework (METSAF)

On May 5, 2026, the European Commission published its Communication on the Temporary Framework for State Aid in Response to the Crisis in the Middle East (“METSAF”).

As the Commission states in the Communication, the worsening situation in Iran and throughout the entire region has led to significant increases of global prices for oil, gas, and fertilisers. In the case of the European Union, a concerning impact on energy security and energy prices has been identified, which may affect the internal market.

Drawing on the experience gained in managing previous crises regarding the control of state aid (i.e., temporary frameworks related to the COVID-19 pandemic and the aggression against Ukraine), the Commission considers that it has been demonstrated that a swift response is essential to mitigate risks to the economy.

Consequently, the Commission decided to adopt the METSAF, which will remain in force, for the time being, until 31 December 2026. This new Temporary Framework is approved as part of the Commission’s AccelerateEU package, aimed at promoting the transition to domestic clean energy sources, and in accordance with the current Clean Industry State Aid Framework (“CISAF”), which aims to enable Member States to support the development of clean energy, clean technology, and a decarbonized industry.

Middle East Crisis Temporary State Aid Framework

The METSAF establishes the substantive assessment criteria that the European Commission will apply when analyzing state aid measures related to energy prices granted to companies affected by the Middle East crisis.

As with previous temporary frameworks, the METSAF does not exempt companies from the obligation to notify the Commission nor does it imply a lack of oversight over the aid granted by Member States; rather, it facilitates a faster and more streamlined approval process for notified aid.

In this regard, the METSAF sets forth the conditions for assessing energy price support that Member States grant to companies operating specifically in agriculture, fisheries and transportation sectors (road and rail transport as well as inland waterways and short sea shipping).

The METSAF allows for a wide variety of forms of state aid (including direct grants, tax and payment advantages, guarantees, loans, and equity) provided that the nominal value of such measures does not exceed the applicable aid ceiling:

(i)    First limit: up to 70% of the additional costs resulting from the increase in fuel and fertiliser prices caused by the crisis, verified at beneficiary level.

In this case, the price increase must be determined by each Member State by looking at the difference between the relevant market price and the applicable historical benchmark price. The total extra costs will then be calculated based on the beneficiary’s current or lasted pre-crisis consumption.

(i)    Second limit: up to € 50,000 on the basis of a general estimate of fuel consumption in the sector, taking into account relevant proxies.

This limit features more flexible requirements for the approval of aid, as it allows Member States to calibrate individual aid amounts taking into account various specific factors related to the potential beneficiary company, such as its size and type of activity, or the estimated fuel consumption in the sector to which it belongs, among others.

With regard to the conditions that the aid must meet, the Commission will assess whether a positive condition (promoting the development of certain economic activities or regions) and a negative condition (not contravening the common interest) are met, in addition to any specific requirements that may be imposed by each of the temporary state aid measures.

Finally, the temporary framework also includes an amendment to the CISAF, specifically to points (120) and (125) of Section 4.5. That Section governs the temporary electricity price relief for energy-intensive users, under which the Commission will consider aid in the form of a temporary reduction in electricity prices for activities in sectors where risks are particularly high to be compatible with the internal market.

The METSAF will remain in force until 31 December 2026, and the eligible period runs from 1 March to 31 December of that year.

Various measures of state aid have already been authorized by the Commission under the METSAF, such as direct subsidies in France with a budget of 212 million euros for the agriculture and aquaculture sector, or direct subsidies granted by Ireland, with a budget of 15 million euros, for the fisheries and aquaculture sector. In the case of Spain, direct grants have been approved for the road transport sector with a budget of 402 million euros, for the fisheries sector with a budget of 25 million euros, and for the agriculture sector with a budget of 54 million euros. 

Assessment

The METSAF is an instrument that will enable a more streamlined review and approval of state aid measures aimed at covering energy costs in the context of the Middle East crisis.

Under the METSAF, the European Commission will consider aid granted to companies in the agriculture, fisheries, and transportation sectors to be compatible with the internal market when such aid covers up to 70% of the extraordinary fuel costs generated by the crisis or, alternatively, up to 50,000 euros, provided the remaining METSAF conditions are met.

Likewise, companies that qualify as energy-intensive users under the CISAF may benefit from an aid intensity of up to 70% of the cost of electricity for eligible consumption, provided that the conditions of the applicable aid scheme are met.

As mentioned above, the METSAF does not exempt companies from the obligation to notify the Commission if aid is notifiable under the applicable state aid control regulations. Thus, the METSAF does not supersede or replace the applicable sector-specific state aid regime, but rather complements it:

• Companies may continue to benefit from aid that is exempt under the General Block Exemption Regulation (GBER), which applies across various economic activities.

 Additionally, from a sectoral perspective, companies engaged in agriculture, fishing, or transportation may receive aid that is exempt from notification under their respective sectoral exemption regulations: Regulation (EU) 2022/2472 and its guidelines, for companies engaged in agriculture; Regulation (EU) 2022/2473 and its guidelines, for those engaged in fishing. Finally, in the transportation sector, a distinction must be made between road and rail transportation on the one hand and inland waterways and short sea shipping transportation on the other. The former is covered by the recent Transport Block Exemption Regulation and its guidelines (TBER and LMTG, analyzed here), while aid for maritime transport is assessed in accordance with specific guidelines.

• When aid does not meet the requirements for a notification exemption under the relevant exemption regulation, it may still benefit from a more expedited authorization procedure if the aid is granted in accordance with the METSAF criteria.