{"id":4209,"date":"2026-04-13T16:25:00","date_gmt":"2026-04-13T14:25:00","guid":{"rendered":"https:\/\/ibsh.hu\/?p=4209"},"modified":"2026-09-23T16:32:29","modified_gmt":"2026-09-23T14:32:29","slug":"ipcei-process","status":"publish","type":"post","link":"https:\/\/ibsh.hu\/en\/ipcei-process\/","title":{"rendered":"The IPCEI Process: From Concept to State Aid Agreement"},"content":{"rendered":"

From the outside, the IPCEI process<\/strong> may easily look like a very large-scale state aid application. In reality, it is far more complex. IPCEI \u2013 Important Project of Common European Interest<\/a> \u2013 is a state aid framework that allows EU Member States to finance strategic industrial projects in compliance with EU state aid rules.<\/p>

In recent years, IPCEI programmes have been launched in areas including semiconductors, batteries, hydrogen, cloud and edge infrastructure, and healthcare<\/strong>. New strategic fields, such as artificial intelligence and biotechnology, are also becoming increasingly prominent in European industrial policy thinking.<\/p>

The stakes are significant: individual projects may receive several hundred million euros, and in some cases even several billion euros, in public co-financing. Just as important, however, is the strategic validation provided by the European Commission: recognition that the project forms part of a broader European interest. That kind of \u201cseal of approval\u201d simply cannot be bought.<\/p>

What is less visible from the outside is just how long, structured and decision-intensive the IPCEI process can be<\/strong>. Below, we explain how a potential IPCEI project progresses from an initial industry concept to the signing of a state aid agreement.<\/p>

1. Identifying the Market Failure<\/h2>

Every IPCEI process starts with a clearly documented market failure<\/strong>. The fundamental question is why the market, on its own, would not finance the technology or value chain at the scale or speed Europe requires.<\/p>

This may be due, for example, to high technological risk, very substantial upfront investment needs, long payback periods, or the fact that a significant share of the project\u2019s positive effects accrue beyond the investing company itself.<\/p>

This rationale is typically developed by the coordinating Member States, industry participants and experts from the European Commission. It forms the foundation of the entire IPCEI. If the market failure case is weak, the project will be difficult to defend during the later Commission assessment.<\/strong><\/p>

2. JEF Approval to Enter the Design Phase<\/strong><\/h2>

The next key step is the Joint European Forum for IPCEI<\/strong><\/a>, or JEF-IPCEI<\/strong>. This is where Member State representatives and the Commission discuss whether a given strategic area \u2013 such as artificial intelligence or computing infrastructure \u2013 should move into the design phase.<\/p>

This is an important green light, but it should not be confused with a funding decision. No state aid is awarded at this stage. The decision simply means that the detailed design of the relevant IPCEI can begin.<\/p>

3. Design Phase: Scope, National Calls and Matchmaking<\/strong><\/h2>

During the design phase, participating Member States define the project\u2019s scope, sub-projects, technological focus and eligibility criteria<\/strong>. The Commission\u2019s IPCEI Design Support Hub may also provide support during this stage.<\/p>

At the same time, national authorities launch calls for expressions of interest \u2013 for example in the form of a Manifestation of Interest, or MoI<\/strong> \u2013 through which companies can indicate their intention to participate.<\/p>

This is also where matchmaking begins. Applicants look for partners in other Member States with whom they can build a genuinely integrated, cross-border project. In many cases, such cooperation is formalised through a Letter of Intent<\/strong>.<\/p>

From a management perspective, this is the first major decision gate. Is there a credible European consortium? Does the project genuinely fit the IPCEI logic? Can the requested amount of state aid be robustly justified?<\/p>

4. National Selection<\/strong><\/h2>

In the next stage, each Member State assesses the projects submitted to it and selects those it intends to take forward with national co-financing.<\/p>

National selection is therefore a necessary but not sufficient condition<\/strong>. A selected company does not automatically become a state aid beneficiary. It simply progresses to the next, significantly more detailed stage of European assessment.<\/p>

5. Pre-Notification: The First Real Stress Test<\/strong><\/h2>

Before the formal notification comes the pre-notification<\/strong> stage, meaning preliminary discussions with the European Commission. At this point, Member States informally test with the Commission whether the project genuinely meets the IPCEI criteria.<\/p>

The assessment covers, among other things, genuine EU added value, the level of private co-financing, spillover effects extending beyond the direct beneficiaries, and the incentive effect<\/strong>.<\/p>

The latter is particularly important: the state aid must genuinely contribute to making the investment happen. It cannot simply provide additional funding for a project that would have gone ahead anyway, at the same time, in the same location and at the same scale.<\/p>

Based on our experience, this iterative exchange is particularly important because a significant proportion of issues tend to surface at this stage<\/strong>, before the project is formally submitted to the Commission.<\/p>

6. Commission Assessment<\/strong><\/h2>

The European Commission\u2019s Directorate-General for Competition, DG COMP<\/strong>, assesses the project in detail against the relevant IPCEI criteria.<\/p>

Among other things, it examines the project\u2019s contribution to EU strategic objectives, its cross-border nature, its level of ambition, the proportionality of the state aid, and whether distortions of competition are kept to a minimum.<\/p>

This is typically one of the longest and most documentation-intensive stages of the process<\/strong>. At this point, legal, financial and economic precision is essential; general strategic arguments alone are no longer sufficient.<\/p>

7. Formal Notification<\/strong><\/h2>

Once the preliminary discussions have been completed, the participating Member States formally notify the state aid measure to the European Commission under Article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU)<\/strong>.<\/p>

At this stage, the project developed during the design phase formally becomes a state aid case.<\/p>

8. Commission Approval Decision<\/strong><\/h2>

The Commission may then approve the individual projects and the related state aid amounts through a formal decision \u2013 either in full, in part, or subject to specific conditions.<\/p>

The decision is public and sets out the maximum amount of state aid<\/strong> that may be granted to each beneficiary. This amount represents a ceiling and is not necessarily identical to the amount the company will ultimately receive.<\/p>

9. Signing the State Aid Agreement<\/strong><\/h2>

The actual contractual stage only begins once Commission approval has been obtained.<\/p>

The agreement concluded between the national granting authority and the beneficiary sets out the project milestones, the payment schedule, reporting and monitoring obligations, and, where applicable, the conditions under which state aid may be recovered<\/strong>.<\/p>

This is the point at which the IPCEI moves from a strategic and policy initiative into a contractually enforceable programme. From here, the project enters implementation \u2013 along with the accountability obligations that come with the use of public funds.<\/p>

How Long Does the IPCEI Process Take?<\/h2>

From a management perspective, this is perhaps one of the most important questions. Based on our own experience and on previous IPCEI waves in batteries, hydrogen, microelectronics and other sectors, the full process typically takes well over a year and, in many cases, can extend to two or three years.<\/strong><\/p>

In recent years, there has been a clear push to accelerate the process. Member States, participating companies and the European Commission itself have all called for faster procedures. Even so, IPCEI is unlikely to become a process that can be completed within just a few months.<\/p>

Companies considering participation should therefore look beyond the expected amount of state aid. They also need to plan for multi-year internal resource requirements, financial and technical modelling, legal work and sustained management involvement.<\/p>

Conclusion: IPCEI Should Be Managed as a Series of Decision Gates<\/h2>

The IPCEI process<\/strong> is not one long state aid application. It is better understood as a sequence of interdependent decision gates, each with its own costs, evidentiary requirements and exit options.<\/p>

For management, the same question should therefore be revisited at every major stage: do the project\u2019s business value, expected state aid and European strategic positioning justify the resources required to move to the next step?<\/strong><\/p>

Companies that recognise this early are able to navigate the IPCEI process much more deliberately. Those that approach it simply as a large state aid application may only discover the true requirements after significant internal resources have already been committed.<\/p>

If you would like to assess whether your company and project are ready for the IPCEI process, request our IPCEI Readiness Assessment<\/strong>.<\/p>","protected":false},"excerpt":{"rendered":"

From the outside, the IPCEI process may easily look like a very large-scale state aid application. In reality, it is far more complex. IPCEI \u2013 Important Project of Common European Interest \u2013 is a state … <\/p>\n

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