The European Commission has approved, under EU State aid rules, Austrian and Spanish schemes to compensate energy-intensive companies for higher electricity prices due to the impact of carbon prices (‘indirect emission costs’) under the EU Emission Trading Scheme (‘ETS’). Both schemes aim to reduce the risk of these companies relocating their activities to countries outside the EU with less ambitious climate policies, resulting in an increase in global greenhouse gas emissions.
For Austria, the Commission approved a scheme with a budget of up to €900 million. This scheme will be open to companies in sectors that are both particularly energy-intensive and exposed to international trade, such as iron and steel, aluminium and other metal industries, the paper industry and the chemical industry. The aid will take the form of a refund of up to 75% of the indirect emission costs incurred in the previous year, with the final payment to be made in 2030. The scheme will cover costs incurred between 1 January 2025 and 31 December 2029. The aid amount will be calculated based on electricity consumption efficiency benchmarks, which ensure that the beneficiaries are encouraged to save energy. To qualify for compensation, companies will have to prove that they invest at least 80% of the aid received into energy efficiency measures or other decarbonisation measures, such as measures to produce renewable electricity and measures to decarbonise the production process.
For Spain, the Commission approved an amendment to a scheme first approved in March 2022, and amended in November 2023. Under the scheme, compensation is granted to eligible companies through a partial refund of the indirect emission costs incurred in the previous year, with the final payment to be made in 2031. The aid amount is calculated based on electricity consumption efficiency benchmarks, which ensure that the beneficiaries are encouraged to save energy.
The amended scheme will extend the eligibility to companies active in new sectors deemed at risk of relocating, as listed in the Annex of the amended ETS State aid Guidelines. Spain also notified an increase in the maximum aid intensity from 75 to 80% of the indirect emissions costs for sectors already covered by the scheme. The budget of €8.51 billion remains unchanged.
Both schemes were assessed under EU State aid rules, in particular the ETS State aid Guidelines. The Commission found that the schemes are necessary and appropriate to support energy-intensive companies to cope with the higher electricity prices and avoid relocation, are limited to the minimum necessary and will have limited impact on competition and trade in the EU.
The non-confidential versions of the decision will be made available under numbers SA.121338 (Austria) and SA.122532 (Spain) in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.
