The European Commission has approved, under EU State aid rules, a €99.5 million (RON 495.2 million) Romanian measure in favor of Nokian Tyres. The aid will support the establishment of a new zero carbon dioxide emission factory for passenger car tyres in Oradea. The measure will contribute to the EU's strategic objectives relating to job creation, regional development and to the green transition of the regional economy.
The Romanian measure
Romania notified the Commission of its plan to support Nokian Tyres in the establishment of a new zero carbon dioxide emission tire factory in Oradea, Bihor County (Nord-Vest region).
Under the measure, the aid will take the form of a direct grant. The aid amount will be around €99.5 million (RON 495.2 million). The investment is estimated to total approximately €650 million.
The plant is expected to have a capacity of approximately 6 million units per year. The project will create approximately 500 direct jobs, as well as further indirect jobs. The project is also expected to bring sustainability benefits by aiming to be the world's first zero carbon dioxide emission tyre factory.
The factory will be located in Oradea, an area eligible for regional aid under Article 107(3)(a) of the Treaty on the Functioning of the EU (‘TFEU').
The Commission's assessment
The Commission assessed the measure under EU State aid rules, in particular Article 107(3)(a) TFEU, which allows Member States to promote the economic development of the most disadvantaged areas of the EU, and the 2021 Regional Aid Guidelines.
The measure will contribute to job creation, the economic development and the competitiveness of a disadvantaged area. In particular, the measure will have a positive impact on employment, creating approximately 500 direct jobs, as well as further indirect jobs.
The aid has an incentive effect, as the beneficiary would not have carried out the project without the public support.
The measure has a limited impact on competition and trade within the EU. In particular, it is necessary and appropriate to set up the new factory of Nokian Tyres, while contributing to the regional development.
The aid is proportionate and limited to the minimum necessary to trigger the investment in Oradea. It will not exceed the maximum allowed aid amount for the project calculated based on the Romanian regional aid map. On this basis, the Commission approved the Romanian measure under EU State aid rules.
Nokian Tyres total investment in the Romanian factory is worth EUR 650 million. The construction of the factory, which will be the first zero CO2 tire factory in the world, started in May 2023. Once completed the factory will produce approximately 6 million tires per year with an expansion potential in the future. The first tire was produced on 1 July 2024, and commercial production will start early 2025.
Sources: nokiantyres.com; ec.europa.eu/commission