Since February 2026, the situation in Iran and the wider region has escalated. The de facto closure of the Strait of Hormuz has already led to significant increases in global prices for oil and gas, with significant price effects felt across sectors of the European economy in all Member States. Between 27 February 2026 and 20 March 2026 alone, crude oil prices increased by 51% and natural gas prices by 85%, while attacks on energy infrastructure, most notably on Qatar’s Ras Laffan facility, the world’s largest liquefied natural gas terminal, led to prolonged loss of Qatar’s LNG export capacity.
The European Central Bank confirmed at its 19 March 2026 policy statement that the Iran crisis made the economic outlook significantly more uncertain, creating upside risks for inflation through higher energy prices and downside risks for economic growth.
The Commission’s Response
The Commission’s response, as announced by President von der Leyen, centres around three distinct tracks, and is expected to be officially announced to EU leaders at an informal European Council meeting in Cyprus on 23 and 24 April 2026. The Commission is pursuing EU-wide coordination of gas storage filling, oil stock releases and emergency measures to avoid distortions to the Single Market. Crucially, President von der Leyen announced that the Commission would consult Member States on more flexible State aid rules that week, and that her goal was for the temporary State aid framework to be adopted still in April 2026. Reducing consumption while respecting consumer choice through energy efficiency levers such as building renovation and renewal of industrial equipment is also expected to be announced as a targeted response to the higher energy prices.
The Draft Temporary Framework
The draft Communication from the Commission, Temporary Iran Crisis Energy Framework, sets out how the Commission will assess State aid measures notified by Member States in response to the crisis.
Legal Basis
The appropriate legal basis for the measures is Article 107(3), point (c) TFEU, which allows aid to develop specific economic sectors while protecting them against economic downturns such as those caused by the current crisis. Critically, the Framework is a compatibility assessment framework, not a block exemption: the Commission, in close cooperation with the Member States concerned, ensures swift assessment of measures upon clear and complete notification of measures covered, and Member States should inform the Commission of their intentions and notify plans to introduce such measures as early and comprehensively as possible.
Sectors Covered
The Framework covers four principal sectors:
Agriculture and fisheries. The sector of primary production of agricultural products is highly vulnerable to input price shocks due to its seasonal production cycles, limited short-term adjustment capacity, and high upfront costs for inputs combined with delayed revenues at harvest. Marine fuel prices have been volatile, fluctuating around EUR 1.0 to 1.3 per litre in EU fishing ports, a sharp increase of more than EUR 0.4 per litre since the beginning of the crisis, and that level already exceeds the long-term break-even fuel price of the EU fishing fleet in aggregate.
Road transport. Diesel prices in the EU increased by approximately 21% in March 2026 compared to the same month in 2025. Given that fuel represents around 30% of the operating costs of freight transport operators and 20% of passenger road transport operators, and that margins in the sector are often around 2 to 3%, the fuel price increase could represent in some Member States more than 7% of operational costs.
Intra-EU short sea shipping. Maritime transport services are essential for the territorial continuity of certain Member States, in particular for ensuring the supply of goods and the mobility of citizens. The sudden increase in fuel prices resulting from the Iran crisis has generated exceptional and unexpected burdens on undertakings in this sector, endangering the continuity and economic viability of essential maritime connectivity services, particularly on routes linking mainland and non-mainland territories and inter-island services identified as strategic or of public interest.
Energy-intensive industries. The Framework also introduces temporary amendments to the Clean Industrial Deal State Aid Framework (CISAF) to provide higher aid intensities for electricity costs in view of the exceptional price spikes.
The Core Conditions
Subject to final confirmation from the Commission, for all three transport and primary production sectors, the operative conditions follow a consistent structure:
- Aid must be granted on the basis of a scheme with an estimated budget, and must be granted by 31 December 2026.
- Aid may be granted in the form of direct grants, tax and payment advantages, or other forms such as repayable advances, guarantees, loans and equity, provided the total nominal value does not exceed the applicable aid intensity and aid ceilings.
- For direct grants, the aid can only cover up to 50% of the extra costs for fuel derived from the Iran crisis, when the relevant market benchmark price for fuel exceeds the applicable historical benchmark price, for an eligible period running from 1 March 2026 to 31 December 2026 at the latest, calculated on the basis of the beneficiary’s current or latest pre-crisis fuel consumption.
- Where aid is granted in the form of repayable advances, guarantees, loans or other repayable instruments, Member States may provide up to 100% of the extra costs for fuel.
The Proportionality Discipline
The Commission is explicit that aid granted under the Framework is proportionate and limited in time and amount to the minimum necessary to attain the objective of mitigating the negative effects of the Iran crisis, and that it will cover only parts of the additional cost increases.
The Excise Duty Option
Separately from the operative schemes, the Framework notes that Member States may consider temporary reductions in fuel excise duties while respecting the harmonised minimum rates established under the Energy Taxation Directive, and that Article 19 measures are in principle exempt from the notification requirement under Article 44 of the General Block Exemption Regulation (GBER). This is the only measure mentioned in the Framework that does not require prior notification, but it operates as a general tax instrument rather than a targeted operator subsidy.
What Comes Next
The Commission’s stated goal is that the temporary State aid framework should be adopted in April 2026. A full communication on the wider package of measures is expected to be presented to leaders at the informal European Council in Cyprus on 23 and 24 April 2026. In the meantime, the draft Framework has been circulated to Member States for consultation, an important procedural step that allows governments to propose amendments, seek clarifications, and flag specific national concerns before the text is finalised and adopted by the Commission.
For Member States with particular dependencies on maritime connectivity, islands, outermost regions, and territories accessible only by sea, the consultation window represents a narrow but significant opportunity to shape the final text of an instrument that will govern how they may respond to one of the most acute transport cost crises in recent European economic history. Should you require more information about how these measures could apply to your business, feel free to contact us.
