State aid: Commission endorses €67 million of public funding for British R&D project led by Rolls-Royce

July 21, 2006

Brussels, 20th July 2006

The European Commission has authorised, under the EC Treaty’s rules on state aid (Article 87), €67 million (£47 million) of public funding for a research and development project led by Rolls-Royce. The project aims to develop new innovative technologies designed to meet the needs of improved environmental performance of aero-engines. As all the requirements of the EU framework for state aid for research and development are satisfied, the Commission considers that the aid does not threaten to distort competition in the Single Market and is therefore compatible with the EC Treaty.

EU Competition Commissioner Neelie Kroes said: “I am pleased to approve aid which promotes research, especially if it helps to improve the environmental performance of aircraft engines”.

The project will carry out industrial research in aircraft engines, in order to develop technologies that would enable meeting stricter environmental standards and reduce ownership costs. In particular, the project aims at contributing to the Advisory Council for Aeronautics Research in Europe’s (ACARE) goals of reducing the perceived noise level and the weight of the engine, and cutting carbon dioxide (CO2) emissions per passenger kilometre (which means a cut in fuel consumption) as well as cutting nitrogen dioxide (NOx) emissions.

The public support for the project is intended to reduce the risk linked to this type of work and to foster co-operation among the industrial partners and universities associated. The project is led by Rolls-Royce PLC, the leading aero-engine producer, and comprises several firms in the sector, such as Bombardier, HS Marston, Smiths and Goodrich. The universities involved are those of Cambridge, Oxford, Birmingham, Belfast and Sheffield.

According to information supplied by the UK authorities, the project will involve around a hundred research jobs and safeguard a number of other jobs. Further, the UK authorities have provided an estimate of the long term impact of the project on the UK economy, which shows its huge potential, depending of course on the successful outcome of the research that will be carried out.

The aid will be paid in the form of grants by the Department of Trade and Industry, together with other Ministerial bodies and several regional development agencies, in Northern Ireland, South and North West, East and West Midlands.

Item source: IP/06/1042 Date: 20/07/2006

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