European Commission opens door to new State aid over Ormuz crisis

The European Commission has approved a new Temporary Framework for State aid measures in response to the Middle East crisis (METSAF) so that EU governments can support, until 31st December 2026, the companies hardest hit by rising energy, fuel and fertiliser costs following the escalation of the conflict in the region and the de facto closure of the Strait of Ormuz. The measure, published on 5th May, gives Member States room to offset part of the additional costs in sectors such as agriculture, fisheries, land transport and short-sea shipping, while maintaining the rules that limit public aid in the internal market.

The new instrument comes at a time of strain for several economic activities dependent on oil, gas, electricity and fertilisers. Since February 2026, the deterioration of the regional situation in the Middle East has disrupted energy markets and caused sharp increases and strong price fluctuations. Brussels notes that the impact is not evenly distributed but is concentrated in sectors exposed to production and transport costs, with effects on logistics chains, territorial connectivity and the supply of essential goods.

The METSAF, an exceptional and provisional instrument

The purpose of the METSAF is not to open a general channel for subsidies, but to allow temporary, targeted and proportionate support where the crisis threatens the continuity of economic activity. The European Commission starts from the premise that certain cost increases may put viable companies at risk and, for that reason, allows Member States to design aid schemes with a defined budget and a limited timeframe.

On that basis, Brussels will be able to authorise support intended to facilitate the development of certain economic activities, provided it does not unduly distort competition or trade between EU countries. The European Commission thus retains control over the scope of national measures, while introducing flexibility to respond to a situation it considers exceptional.

Agriculture and fisheries

One of the main pillars of the framework is aimed at primary agricultural production, fisheries and aquaculture. Member States will be able to grant aid to partially offset additional fuel and fertiliser costs incurred between 1st March and 31st December 2026. As a general rule, coverage may reach up to 70% of extraordinary costs calculated on the basis of reasonable historical benchmarks and recognised indices. The text does not set a general maximum amount per beneficiary, although it requires aid to be aligned with the actual increase in costs and with the criteria laid down by each national scheme.

Transport

Land transport is also among the sectors covered. Railway companies, road operators and activities linked to inland waterways may receive support where they can demonstrate the impact of the exceptional increase in fuel prices. The aim is to prevent rising energy costs from interrupting transport services or worsening strains in supply chains already affected by the crisis. Member States will be able to channel aid through various forms, including direct grants, tax or payment advantages, repayable advances, guarantees, loans or equity.

Short-sea shipping within the EU will also have a specific route to support. Brussels regards it as relevant for territorial connectivity, particularly on island routes and journeys linked to the supply of essential goods. Under the European Commission’s approach, governments will be able to intervene where fuel costs jeopardise maritime services that perform an economic and territorial function. In aviation, by contrast, the EU executive is not creating an additional instrument within this framework and refers instead to existing mechanisms, such as urgent public services and social aid designed to maintain connectivity in remote regions.

Conditions and alternative measures

The framework also provides for a simplified alternative to ease administrative management. Member States may grant aid calibrated through sectoral indicators, without having to calculate case by case all the additional costs borne by each company, if support does not exceed €50,000 per beneficiary. This option is intended to speed up the arrival of funds to smaller companies or to those with less capacity to document complex cost increases.

Companies that were already in difficulty before 28th February 2026 will not be eligible for this aid, except for certain micro and small enterprises. Brussels is thereby drawing a line between problems arising from the Middle East crisis and pre-existing financial difficulties. Member States will also have transparency obligations. They will have to publish individual aid awards above €100,000 and, in primary agriculture and fisheries, those exceeding €10,000. They will also be required to keep records for ten years, so that the European Commission can verify how the funds have been used.

Aid intensity

The intensity of the aid will depend on the instrument chosen. Under ordinary formulas, compensation may reach up to 70% of extraordinary additional costs. In repayable instruments that are not converted into grants, coverage may reach 100% of the additional cost. The European Commission is also introducing temporary adjustments to the Clean Industrial Deal State Aid Framework (CISAF) in order to allow greater flexibility in the face of extraordinary increases in electricity prices. This change places the response to the energy crisis within an architecture that seeks, at the same time, to preserve the transition towards a lower-emissions economy.

The immediate precedent for the METSAF lies in the use of temporary frameworks during other recent crises, when Brussels relaxed State aid rules to deal with economic shocks that exceeded Member States’ ordinary response capacity. This happened during the pandemic, with the Temporary Framework approved on 19th March 2020 to allow countries to support companies affected by covid-19, and was repeated after Russia’s invasion of Ukraine, with the Temporary Crisis Framework adopted on 23rd March 2022 to support companies and sectors hit by the economic consequences of the conflict, particularly in energy markets.