IPCEI

The European Union created Important Projects of Common European Interest (IPCEIs) with the aim of strengthening strategic industrial value chains for Europe through research & innovation or infrastructure investments. Over the past five years, ten IPCEIs have been launched in various key sectors: microelectronics in 2018 (Microelectronics) and in 2021 (ME / CT), electric batteries in 2019 (Batteries) and in 2020 (EuBatIn), hydrogen in 2020 (Hy2Tech and Hy2Use) and in 2021 (Hy2Infra and Hy2Mobility), cloud computing (CIS) and healthcare (Health) in 2022.

Funding for these projects is provided to participating companies by the Member States, implying that it qualifies as State aid that must be compatible with European regulations – the IPCEI Communication. The number of Member States involved, the number of participating companies, and the level of funding have all increased over time. For example, in 2018, four Member States provided €1.7 billion to 27 partners for the IPCEI Microelectronics, while in 2021 fourteen Member States allocated €8.1 billion to 56 partners for the IPCEI ME/CT (an average of €145 million per company).

An IPCEI is a large cross-border collaborative project coordinated by a Member State, which has a significant impact on the economy, society, and the environment, benefiting the entire EU. Activities that can be funded include research and development (R&D), first industrial deployment (FID, or TRL8), or investment in open infrastructures. Eligible costs include Opex and depreciation for R&D and FID activities, as well as construction costs for infrastructure. The funding rate (aid intensity) is determined by the project’s funding gap, which can refer to the alternative project that would be undertaken in the absence of IPCEI funding – the counterfactual project. The aid intensity can go up to 100% of eligible costs, which is a unique opportunity within European state aid regulations.

The process of constructing an IPCEI is a lengthy one. It begins with several Member States jointly initiating the initiative, which can take several months. Then, each country launches open calls, to which companies must respond to participate in this IPCEI. After the evaluation phase, selected companies must establish collaborations (matchmaking) to ensure that the IPCEI becomes an integrated European project. Once the IPCEI is constructed, it undergoes notification to the European Commission to receive its green light according to competition rules, with responsibility lying with the Member States that provide funding. This involves individual submissions for each partner company, plus one for the IPCEI itself, which integrates all individual contributions. Finally, after approval from the European Commission and the signing of the financing agreement, the company can receive the initial IPCEI funding and execute its project. The entire process takes between one and two years.

The main eligibility criterion is that the proposed innovations must surpass the global state of the art for R&D&I projects, or that the infrastructure is open and accessible on a non-discriminatory basis. Cross-border collaborations together with commitments by beneficiaries to disseminate project results beyond the IPCEI partners and Member States providing funding (referred to as spillovers) also constitute key criteria. From the perspective of the funding Member States, projections of job creation stemming from the projects hold significant importance.

Since 2018, european economics has supported 134 projects in 15 Member States within each of the 10 IPCEIs, with 97 of them being successful in securing over €19 billion in State aid globally. Our role involves supporting our clients in the design and engineering of projects that are IPCEI-compatible and maximize funding. We also help them prepare their national-level application documents and notifications to the European Commission until they obtain its approval, with a 100% success rate in this area.