EC approves 99.5 million euro state aid for new Nokian Tyres factory in Romania

The European Commission has approved, under EU State aid rules, a €99.5 million (RON 495.2 million) Romanian measure in favour of Nokian Tyres. The aid will support the establishment of a new zero carbon dioxide emission factory for passenger car tyres in Oradea. The measure will contribute to the EU’s strategic objectives relating to job creation, regional development, and to the green transition of the regional economy.   Margrethe Vestager, Executive Vice-President in charge of competition policy: „This €99.5 million measure will enable Romania to support the establishment of a new zero CO2 emission tyre factory in Oradea. The project is expected to be a world first and will contribute to the competitiveness and green transition of this area.”   The Romanian measure   Romania notified the Commission of its plan to support Nokian Tyres in the establishment of a new zero carbon dioxide emission tyre factory in Oradea, Bihor County (Nord-Vest region).   Under the measure, the aid will take the form of a direct grant. The aid amount will be around €99.5 million (RON 495.2 million). The investment is estimated to total approximately €650 million.   The plant is expected to have a capacity of approximately 6 million units per year. The project will create approximately 500 direct jobs, as well as further indirect jobs. The project is also expected to bring sustainability benefits by aiming to be the world's first zero carbon dioxide emission tyre factory.   The factory will be located in Oradea, an area eligible for regional aid under Article 107(3)(a) of the Treaty on the Functioning of the EU (‘TFEU').   The Commission's assessment   The Commission assessed the measure under EU State aid rules, in particular Article 107(3)(a) TFEU, which allows Member States to promote the economic development of the most disadvantaged areas of the EU, and the 2021 Regional Aid Guiglines.     The Commission found that: The measure will contribute to job creation, the economic development and the competitiveness of a disadvantaged area. In particular, the measure will have a positive impact on employment, creating approximately 500 direct jobs, as well as further indirect jobs. The aid has an incentive effect, as the beneficiary would not have carried out the project without the public support. The measure has a limited impact on competition and trade within the EU. In particular, it is necessary and appropriate to set up the new factory of Nokian Tyres, while contributing to the regional development. The aid is proportionate and limited to the minimum necessary to trigger the investment in Oradea. It will not exceed the maximum allowed aid amount for the project calculated based on the Romanian regional aid map.   On this basis, the Commission approved the Romanian measure under EU State aid rules.   Background   Europe has always been characterised by significant regional disparities in terms of economic well-being, income and unemployment. Regional aid aims to support economic development in disadvantaged areas of Europe, while ensuring a level playing field between Member States.    In the 2021 Regional Aid Guiglines, the Commission sets out the conditions under which regional aid may be considered to be compatible with the internal market and establishes the criteria for identifying the areas that fulfil the conditions of Article 107(3)(a) and (c) of the TFEU (a- and c-areas respectively). On this basis, Member States notified their regional aid maps to the Commission for approval.   On 20 December 2021, the Commission approved the Romanian regional aid map for granting regional aid from 1 January 2022 to 31 December 2027. On 20 February 2023, the Commission approved amendments to the Romanian regional aid map in the context of the Just Transition Fund.