IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

Yes

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

firm-specific

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 01 Apr 2015 | Removal date: 31 Dec 2017
Still in force

Financial grant

According to the UK, the "The beneficiary of the aid is Reaction Engines Limited ("REL"), a medium-sized company established in the UK. [...] The company is seeking to develop SABRE design, a project which is to be undertaken from April 2015 (or from the clearance of the aid from the Commission) until end of 2017 ("SABRE design project"), and is purportedly unique as it combines a rocket engine with an air-breathing engine within one installation. [...] REL needs GBP 120 million for the SABRE design project, of which GBP 50 million will be R&D&I aid in the form of a grant, while GBP 60 million will be provided by private investors. The remaining GBP 10 million have already been raised by REL in equity from private investors. The UK authorities claim that the clearance of the GBP 50 million State aid combined with additional GBP 60 million from private investors would enable substantial advancement in the technology, thereby de-risking the follow-on research activities needed for the integration of the key components into a fully scaled SABRE engine for test." (para. 6, 10 and 20 letter from the EC to the UK, Brussels 02.12.2015)

Based on the findings of the European Commission, "[...] the measure is likely to distort competition and affect trade between Member States as other undertakings work or could work on competing products or technologies in the UK or other EU countries. In addition, REL signed or envisage signing partnership agreements with other firms active in the EU aeronautic industry." (para. 27  letter from the EC to the UK, Brussels 02.12.2015)

In the GTA database the determination of whether a policy instrument discriminates against foreign commercial interests turns on whether it creates or alters the relative treatment of domestic firms versus foreign commercial interests. On this metric, the state aid proposed here is discriminatory because the state aid is not available to competing firms outside of the implementing jurisdiction.

AFFECTED COUNTRIES

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AFFECTED SECTORS AND PRODUCTS

431 Engines & turbines & parts

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