On 1 January 2007 the new de minimis block exemption regulation entered into force. The new block exemption regulation increases the ceiling for de minimis aid from EUR 100,000 to EUR 200,000 over a period of three fiscal years.

As well as the ceiling being increased to EUR 200,000, the block exemption regulation has also been extended to include aid in respect of the processing of and marketing of agricultural products and road transport (although in the case of road transport the ceiling is EUR 100,000 and there is a prohibition against using de minimis aid for purchasing road freight vehicles).

The new block exemption regulation also lays down that all aid must be transparent, that is, the precise amount of aid must be clearly and accurately stated in advance.

This means that for risk capital, due to the European Commission's view that it is difficult to ascertain the precise amount of aid in advance of such measures, the block exemption only applies where the aid invested by a fund into a target company does not exceed the EUR 200,000 threshold.

In addition, aid provided under individual guarantees to small and medium-sized enterprises (not in difficulty) shall be exempted provided that the loan underlying the guarantee does not exceed EUR 1.5 million (EUR 750, 000 in the case of the road transport sector). However, it shall also be possible to provide loan guarantees of over EUR 1.5 million under the new regulation provided that the Member State can demonstrate that the aid element does not exceed the EUR 200,000 threshold.

The new block exemption regulation also clarifies that de minimis aid cannot be combined with state aid in respect of the same eligible costs if such cumulation results in the aid intensity exceeding that fixed in the block exemptions or individual state aid decisions (e.g. training aid block exemption).

A new system of monitoring aid has also been implemented by the new block exemption such that the three-year monitoring period will now be determined by reference to fiscal years operating in individual Member States rather than the previous method of using calendar years.