EU approves 20.5 million euro French aid for Renault hybrid fuel project

BRUSSELS (Reuters) - European Union state aid regulators approved on Wednesday 20.5 million euros ($27.73 million) in French support for carmaker Renault to develop a diesel hybrid technology which will cut diesel use and carbon dioxide emissions for vans. The European Commission said the French state aid, which consisted of 3.8 million euros in grants, 3.4 million euros for industrial research and 13.1 million euros for experimental development, was in line with EU rules. "This project should result in a substantial reduction in (vehicles') fuel consumption and carbon dioxide emissions, thereby contributing to the EU's targets for innovation, the environment and energy security, without affecting competition," EU Competition Commissioner Joaquin Almunia said. (Reporting by Foo Yun Chee; Editing by Adrian Croft)