Environmental mainstreaming in EU State aid policy

ClientEarth argues that EU State aid policy currently lacks environmental mainstreaming, allowing for the approval of aid that supports environmentally harmful activities, such as fossil fuels. The briefing asserts that there are no fundamental legal obstacles to integrating environmental requirements and proposes three main pillars: systemic verification of compliance with EU environmental law, horizontal application of the "Do No Significant Harm" (DNSH) principle, and the inclusion of environmental risks when assessing the negative effects of aid on competition and trade.

• EU State aid policy currently lacks environmental mainstreaming, which results in a deficiency of safeguards to prevent the granting of environmentally harmful aid.
• The European Commission's current practice for verifying compliance with EU environmental law is insufficient, as it relies on Member State declarations and a limited check of pending infringement procedures.
• The "Do No Significant Harm" (DNSH) principle is only applied sporadically in State aid policy, appearing in a few instruments like the CEEAG and Regional aid guidelines, rather than being integrated horizontally across all guidelines and regulations.
• There are no fundamental legal barriers to environmental mainstreaming in State aid policy, although the Commission must still balance aid measures against negative effects on the internal market and respect Member States' rights to determine their energy mix under Article 194(2) TFEU.
• Environmental considerations should be integrated into the assessment of an aid measure's negative effects on competition and trade, as climate and biodiversity risks can make certain sectors uncompetitive and lead to market inefficiencies.
• The briefing recommends that the compatibility conditions for State aid should become more restrictive as the negative environmental effects of the aid increase, as the effects become more long-term, or as more environmentally friendly alternatives exist.

APA

Nieuwbourg, S., & Fiorilli, L. (2025). Environmental mainstreaming in EU State aid policy. ClientEarth. https://www.clientearth.org/media/o0kb2bga/briefing-environmental-mainstreaming-in-state-aid-updated-version-24042025.pdf

Chicago

Nieuwbourg, Stphanie, and Lorenzo Fiorilli. Environmental mainstreaming in EU State aid policy. ClientEarth, 2025. https://www.clientearth.org/media/o0kb2bga/briefing-environmental-mainstreaming-in-state-aid-updated-version-24042025.pdf.

Wikipedia

{{cite report |last1=Nieuwbourg |first1=Stphanie |last2=Fiorilli |first2=Lorenzo |title=Environmental mainstreaming in EU State aid policy |publisher=ClientEarth |date=April 2025 |url=https://www.clientearth.org/media/o0kb2bga/briefing-environmental-mainstreaming-in-state-aid-updated-version-24042025.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{nieuwbourg2025environmental, author = {Nieuwbourg, Stphanie and Fiorilli, Lorenzo}, title = {{Environmental mainstreaming in EU State aid policy}}, institution = {ClientEarth}, year = {2025}, month = apr, url = {https://www.clientearth.org/media/o0kb2bga/briefing-environmental-mainstreaming-in-state-aid-updated-version-24042025.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }