Commission Decision (EU) 2025/2630 of 16 December 2025 on the application of Article 106(2) of the Treaty on the Functioning of the European Union to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest and repealing Decision 2012/21/EU
Subject matter
This Decision sets out the conditions under which State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest (‘SGEI’) is compatible with the internal market and exempt from the requirement of notification laid down in Article 108(3) of the Treaty. For the identification of the aid recipient in this Decision, the notion of single undertaking as defined in Article 2(2) of Commission Regulation (EU) 2023/2832 applies.
Scope
1. The exemption from the requirement of notification laid down in Article 108(3) of the Treaty set out in this Decision applies to State aid in the form of public service compensation, granted to undertakings entrusted with the operation of SGEI as referred to in Article 106(2) of the Treaty, which falls within one of the following categories:
(a)
compensation not exceeding an annual amount of EUR 20 million for the provision of SGEI in areas other than transport and transport infrastructure, including social services not referred to in point (c) and critical medicines;
(b)
compensation for the provision of SGEI by hospitals providing medical care, including, where applicable, emergency services; the pursuit of ancillary activities directly related to the main activities, notably in the field of research, does not, however, prevent the application of this paragraph;
(c)
compensation for the provision of SGEI meeting social needs as regards health and long-term care, childcare, access to and reintegration into the labour market, and the care and social inclusion of vulnerable groups including accessibility and assistive technology services for persons with disabilities;
(d)
compensation for the provision of social housing SGEI where social housing services meet the requirements set out in the Annex;
(e)
compensation for the provision of affordable housing SGEI where affordable housing services meet the requirements set out in the Annex;
(f)
compensation for the provision of SGEI as regards air links or maritime links to islands on which the average annual traffic during the 2 financial years preceding that in which the SGEI was assigned does not exceed 300 000 passengers, and when the maritime links to islands include freight traffic, 75 000 linear metres of freight ( 22 ) ;
(g)
compensation for the provision of SGEI as regards airports and ports for which the average annual traffic during the 2 financial years preceding that in which the SGEI was assigned does not exceed 500 000 passengers, in the case of airports, and 400 000 passengers in the case of ports, or for ports located in outermost regions regardless of the average annual traffic.
2. Where the amount of compensation referred to in paragraph 1, point (a), varies over the duration of the entrustment, the annual amount shall be calculated as an average of the annual amounts of compensation expected to be made over the entrustment period.
The annual threshold referred to in paragraph 1, point (a) applies per SGEI entrusted to an undertaking. In case of a joint or individual entrustment in several Member States, the compensation threshold applies for each Member State where the service is provided.
3. This Decision shall apply where the undertaking is entrusted with the operation of the SGEI for a period that does not exceed 10 years. Where the period of entrustment exceeds 10 years, the provisions of this Decision shall only apply to the extent that a significant investment is required from the service provider that needs to be amortised over a longer period in accordance with generally accepted accounting principles.
4. Where, during the period of the entrustment, the conditions for the application of this Decision are no longer met, the aid shall be notified in accordance with Article 108(3) of the Treaty.
5. In the field of air and maritime transport, this Decision shall only apply to State aid in the form of public service compensation, granted to undertakings entrusted with the operation of SGEI as referred to in Article 106(2) of the Treaty, which complies with Regulation (EC) 1008/2008 and, respectively, Regulation (EEC) 3577/92 where applicable.
6. This Decision shall not apply to State aid in the form of public service compensation granted to undertakings in the field of land transport.
Compatibility and exemption from notification
State aid in the form of public service compensation that meets the conditions laid down in this Decision shall be compatible with the internal market and shall be exempt from the prior notification obligation pursuant to Article 108(3) of the Treaty, provided that the State aid also complies with the requirements flowing from the Treaty or from relevant sectoral Union legislation.
Entrustment
Operation of the SGEI shall be entrusted to the undertaking concerned by way of one or more acts, the form of which may be determined by each Member State. The act or acts shall include, in particular, the following information:
(a)
the content and duration of the public service obligations;
(b)
the undertaking and, where applicable, the territory concerned;
(c)
the nature of any exclusive or special rights assigned to the undertaking by the granting authority;
(d)
a description of the compensation mechanism and the parameters for calculating, controlling and reviewing the compensation;
(e)
the arrangements for avoiding and recovering any overcompensation.
Compensation
1. The amount of compensation shall not exceed what is necessary to cover the net cost incurred in discharging the public service obligations, including a reasonable profit.
2. The net cost may be calculated as the difference between costs as set out in paragraph 3 and revenues as set out in paragraph 4. Alternatively, it may be calculated as the difference between the net cost for the undertaking of operating with the public service obligation and the net cost or profit of the same undertaking operating without the public service obligation.
3. The costs to be taken into consideration shall comprise all the costs incurred in operating the SGEI. They shall be calculated on the basis of the following generally accepted cost accounting principles:
(a)
where the activities of the undertaking in question are confined to the SGEI, all its costs may be taken into consideration;
(b)
where the undertaking also carries out activities falling outside the scope of the SGEI, only the costs related to the SGEI shall be taken into consideration;
(c)
the costs allocated to the SGEI may cover all the direct costs incurred in operating the SGEI and an appropriate contribution to costs common to both the SGEI and other activities;
(d)
the costs linked with investments, including infrastructure, may be taken into account when necessary for the operation of the SGEI.
4. The revenue to be taken into consideration shall include at least the entire revenue earned from the SGEI, regardless of whether the revenue is classified as State aid within the meaning of Article 107 of the Treaty. Where the undertaking in question holds special or exclusive rights linked to activities, other than the SGEI for which the aid is granted, that generate profits in excess of the reasonable profit, or benefits from other advantages granted by the State, those profits or benefits shall be included in its revenue, irrespective of their classification for the purposes of Article 107 of the Treaty. The Member State concerned may decide that the profits accruing from other activities outside the scope of the SGEI in question are to be assigned in whole or in part to the financing of the SGEI.
5. Where an undertaking carries out activities falling both inside and outside the scope of a particular SGEI or several SGEI, the internal accounts shall show separately the costs and receipts associated with each SGEI and those of other services, as well as the parameters for allocating costs and revenues. The costs linked to any activities outside the scope of the SGEI shall cover all the direct costs, an appropriate contribution to the common costs and an adequate return on capital. No compensation shall be granted in respect of costs linked to any activities outside the scope of the SGEI.
6. Member States shall require the undertaking concerned to repay any overcompensation received.
Reasonable profit
1. For the purposes of this Decision, ‘reasonable profit’ means the rate of return on capital that would be required by a typical undertaking considering whether or not to provide the SGEI for the whole period of entrustment, taking into account the level of risk. The ‘rate of return on capital’ means the internal rate of return that the undertaking makes on its invested capital over the duration of the period of entrustment. The level of risk depends on the sector concerned, the type of service and the characteristics of the compensation.
2. In determining what constitutes a reasonable profit, Member States may introduce incentive criteria relating, in particular, to the quality of service provided and gains in productive efficiency. Efficiency gains shall not reduce the quality of the service provided. Any rewards linked to productive efficiency gains shall be set at a level such as to allow balanced sharing of those gains between the undertaking and the Member State and/or the users.
3. For the purposes of this Decision, a rate of return on capital that does not exceed the relevant swap rate plus a premium of 100 basis points shall be regarded as reasonable in any event. The relevant swap rate shall be the swap rate the maturity and currency of which correspond to the duration and currency of the entrustment act. Where the provision of the SGEI is not connected with a substantial commercial or contractual risk, in particular when the net cost incurred in providing the SGEI is essentially compensated ex post in full, the reasonable profit may not exceed the relevant swap rate plus a premium of 100 basis points.
4. Where, in specific circumstances, it is not appropriate to use the rate of return on capital, Member States may rely on profit level indicators other than the rate of return on capital to determine what the reasonable profit should be, such as the average return on equity, return on capital employed, return on assets or return on sales. The ‘return’ means the earnings before interest and taxes in that year. The average return is computed using the discount factor over the life of the contract as specified by the Communication from the Commission on the revision of the method for setting the reference and discount rates ( 23 ) . Whatever indicator is chosen, the Member State shall be able to provide the Commission upon request with evidence that the profit does not exceed what would be required by a typical undertaking considering whether or not to provide the service, for instance by providing references to returns achieved on similar types of contracts awarded under competitive conditions.
Control of overcompensation
1. Member States shall ensure that the compensation granted for the operation of the SGEI meets the requirements set out in this Decision and in particular that the undertaking does not receive compensation in excess of the amount determined in accordance with Article 5. Member States shall provide evidence of compliance upon request from the Commission. For that purpose, Member States shall carry out regular checks, at least every 5 years during the period of entrustment and at the end of that period.
2. Where the Member State has established a fixed compensation level for an SGEI which adequately anticipates and incorporates the efficiency gains that the service provider can be expected to make over the period of entrustment, on the basis of a correct allocation of costs and revenues and of reasonable expectations, the overcompensation check shall be limited to verifying that the level of profit to which the provider is entitled in accordance with the entrustment act is reasonable from an ex ante perspective.
3. Where the activity of the provider of the SGEI is essentially limited to the provision of that SGEI, with annual commercial revenues not exceeding 5% of the total annual revenues during the entrustment period, and the provider is legally obliged to reinvest all its profits into the provision of that SGEI, ex post checks to verify the absence of overcompensation shall not be necessary. When applying this exemption, Member States shall ensure that the commercial revenues remain ancillary to the provision of the SGEI.
4. Where an undertaking has received compensation in excess of the amount determined in accordance with Article 5, the Member State concerned shall require the undertaking concerned to repay any overcompensation received. If future compensation payments are foreseen by an ongoing SGEI entrustment, the parameters for the calculation of the compensation shall be updated for the future and, where the amount of overcompensation does not exceed 10% of the amount of the average annual compensation, such overcompensation may be deducted from the next compensation payment.
Transparency
1. Member States shall ensure that, from 1 January 2028, information on aid exceeding EUR 1 million per undertaking and per SGEI over the entrustment period, is registered in a central register at national or Union level. The information in the central register shall contain the identification of the beneficiary, the national legal basis, the compensation amount, the granting date, the duration of the entrustment, the granting authority, the aid instrument and the sector involved on the basis of the statistical classification of economic activities in the Union (‘NACE classification’). The central register shall be set up in such a way as to enable easy public access to the information whilst ensuring compliance with the Union rules on data protection, including through the pseudonymisation of specific entries where necessary.
2. Member States shall register the information set out in paragraph 1 in the central register on aid granted by any authority within the Member State concerned within 20 working days following the granting of the aid. Member States shall take appropriate measures to ensure the accuracy of the data contained in the central register.
3. Member States shall keep records of the registered information on aid granted for 10 years from the date on which the aid was granted.
4. On written request by the Commission, the Member State concerned shall provide the Commission, within 20 working days or a longer period set out in the request, with all the information that the Commission considers necessary for assessing whether the conditions of this Decision have been complied with.
Transitional provisions
This Decision shall apply to the following individual aid and aid schemes:
(a)
any aid scheme which took effect before the entry into force of this Decision that was compatible with the internal market and exempted from the notification requirement in accordance with Decision 2012/21/EU shall continue to be compatible with the internal market and exempt from the notification requirement for a further period of 2 years from the entry into force of this Decision;
(b)
any aid scheme or individual aid for a social SGEI which took effect before the entry into force of this Decision that was compatible with the internal market and exempted from the notification requirement in accordance with Decision 2012/21/EU shall continue to be compatible with the internal market until the end of the duration of the entrustment act;
(c)
any aid scheme or individual aid which took effect before the entry into force of this Decision that was not compatible with the internal market nor exempted from the notification requirement in accordance with Decision 2012/21/EU but which fulfils the conditions laid down in this Decision, in particular those laid down in Article 2(3), shall be deemed compatible with the internal market and exempt from the requirement of prior notification.
Repeal
Decision 2012/21/EU is hereby repealed.
Entry into force
This Decision shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
Supplementary provisions
ANNEXSupplementary provisions
ANNEX
1.
Social housing as an SGEI for the purposes of this Decision, shall meet the following requirements:
a.
Be available to disadvantaged households or socially less advantaged groups, including people experiencing homelessness, who due to solvency constraints are unable to obtain housing at market conditions; social housing SGEI may include a limited share of non-disadvantaged households to avoid spatial concentration of poverty.
b.
Meet the minimum quality and environmental standards and accessibility requirements in force in the Member State.
c.
Be available for social housing purposes for a minimum period of 20 years from the beginning of the delivery of the service; Member States may allow a shorter period provided that it is duly justified for example by the temporary nature of the State intervention. Such justification must be recorded and provided to the Commission upon request in line with Article 8(4).
Where the activity of the provider of the SGEI is essentially limited to the provision of that SGEI, with annual commercial revenues not exceeding 5 % of the total annual revenues during the entrustment period, and the provider is legally obliged to reinvest all its profits into that SGEI, it may be exempted from this obligation of respecting a minimum duration of 20 years. When applying this exemption, Member States shall ensure that the commercial revenues remain ancillary in relation to the provision of the SGEI.
d.
Compensation for social housing SGEI may cover investment costs for the construction of new buildings, including land acquisition, the acquisition of existing apartments or buildings to be transformed or renovated, the transformation or the renovation of existing apartments or buildings (or individual building elements thereof), compliance with accessibility requirements for older people or persons with disabilities, compliance with environmental standards, adaptation for climate resilience, as well as operating costs, where necessary for the operation of the service.
2.
Affordable housing as an SGEI for the purposes of this Decision, shall meet the following requirements:
a.
Be available to households that are not able, due to market outcomes and notably market failures, to access housing at affordable conditions.
Housing affordability must be measured on the basis of reliable indicators such as, for example, a rent-to-income ratio, a mortgage-payment to income ratio, a price to income ratio, the housing cost overburden rate, or years of income needed to buy a home. Energy costs must be considered as part of the total housing costs.
The Member State’s identification of affordable housing needs, as well as the indicators and benchmarks used, must be recorded and provided to the Commission upon request in line with Article 8(4).
An affordable housing SGEI must benefit households in real need of affordable housing, notably by taking account of the income and composition of the household.
Member States must ensure that the subsidised housing is and remains used for affordable housing.
b.
Must have affordable housing prices or rents, below market prices and determined on the basis of transparent criteria, such as household income, market prices, costs incurred by housing providers. Housing prices or rents may take into account other housing costs such as energy costs.
c.
Housing prices or rents must not be reduced below what is necessary to ensure affordability for the eligible households.
d.
Meet the minimum quality and environmental standards and accessibility requirements in force in the Member States.
e.
Be open on equal terms to all providers able to deliver the service, regardless of their legal status and/or public or private nature.
f.
Be available for affordable housing purposes for a minimum period of 20 years from the beginning of the delivery of the service; Member States may allow a shorter period provided that it is duly justified, for example by the temporary nature of the State intervention. Such justification must be recorded and be provided to the Commission upon request in line with Article 8(4).
Where the activity of the provider of the SGEI is essentially limited to the provision of that SGEI, with annual commercial revenues not exceeding 5 % of total annual revenues during the entrustment period, and the provider is legally obliged to reinvest all its profits into that SGEI, it may be exempted from this obligation of respecting a minimum duration of 20 years. When applying this exemption, Member States shall ensure that the commercial revenues remain ancillary in relation to the provision of the SGEI.
g.
Compensation for affordable housing SGEI may cover investment costs for the construction of new buildings, including land acquisition, the acquisition of existing apartments or buildings to be transformed or renovated, the transformation or the renovation of existing apartments or buildings (or individual building elements thereof), compliance with accessibility requirements for older people or persons with disabilities, compliance with environmental standards, adaptation for climate resilience, as well as operating costs, where necessary for the operation of the service.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
